(How we saved our client reputation and business in France.)
VAT Penalty In France: How we saved our Client Reputation
The background
“Mr. Teixeira, I need your help. My CHU just got a One Million Euro fine from the French customs. They say we purchased radiation equipment from your company. But we didn’t. Can you explain this?”
No professional wants to get that call.
Our client, a global leader in radiation therapy equipment, manufactures in the U.S. and ships worldwide.
→ U.S. manufacturing
→ Swiss subsidairy as Importer of Record
→ Swiss subsidairy has fiscal reps across 7 EU countries for VAT purposes
→ Final customers: CHUs (university hospitals), 30 different entities, with over 200 sites in France
To many supply chain teams, a correct delivery address is ‘good enough’.
But to French authorities?
A misdeclared VAT number = tax fraud.
What Went Wrong
This shipment involved 5 different players:
- The U.S. parent (manufacturer)
- The Swiss principal (seller)
- French fiscal representative
- Customs broker
- The CHU (client)
Somewhere along the way, the wrong customer VAT number was declared.
The result?
→ INTRASTAT & VAT filings misaligned
→ Customs flagged the discrepancy
→ French authorities issued a €1M penalty… to the CHU
The fallout?
→ Furious customer
→ Reputational risk
→ Business in France on the line
What We Did
We took ownership.
→ Admitted the control gap
→ Escalated directly to French authorities
→ Explained the operational complexity and human error (U.S. teams handle this type of transaction just 1–2x/month)
→ Provided a corrective roadmap, fast:
✅ Verified all active customer VAT numbers
✅ Required VAT certificates for new clients
✅ Created a mandatory control step in ERP: no order without VAT validation
✅ Linked VAT documentation to customer master data
We didn’t hide it. We just fixed it.
The Outcome
✅ Penalty canceled
✅ Reputation intact
✅ French client satisfied (despite the scare)
✅ Compliance controls now bulletproof
#GOATConsultants™-Level Insights:
Hard truth: INTRASTAT is one of the most overlooked tools by tax and supply chain teams.
But it’s how EU authorities detect fraud, and it’s how companies lose millions without ever seeing it coming.
Every company makes mistakes. What matters is how fast and how well you fix them.
💡 In Supply Chain Management: Plan for the worst. Automate the rest.”
Enjoy more Success Stories:
- VAT Compliance Failures Nearly Cost Biotech Millions
- Biotech customs compliance: How we saved €800K in life-saving medicine
- VAT Compliance As An Asset: How We Turned €250K into €1.9M – 660% ROI
- You cost a Customer One Million Euro in VAT penalty
- How we cut €100K/year in VAT compliance costs
- How we recovered €800K from German VAT authorities
