Why It Makes Sense to Invest in the Creative Industries and Support Them

Why it makes sense to invest in the creative industries and support them

While many fast-growth companies in the creative industries are currently the target of heavy private equity investments and a flurry of mergers and acquisitions, it makes sense, from a tax and financial standpoint, for individuals and corporate investors to go ‟long” on creative startups and SMEs.

1. ‟Good times” are coming back: it’s time to invest in the creative industries

With the global economy recovering from the 2007-2012 recession and a tangible boost of confidence, financial investors and corporates alike are becoming more bullish and enterprising, especially in relation to the creative industries. It is time to invest in the creative industries.

In the luxury goods sector, the historical data is very promising, with 2012 being the third year in a row of double- digit growth for personal luxury goods, at 10 percent annual growth rate, now over the Euro200 billion ceiling (1). There was no recession at all, in the luxury goods sector.

As a reflection of the outperformance of this creative sector, many luxury stalwarts have been either acquired (such as Loro Piana and Bulgari sold to LVMH as well as Christopher Kane and Pomellato sold to Kering), invested into (such as the investment of equity investment funds Ardian and Blackstone into a minority participation stake in Versace (2) and the negotiations for an investment made by buyout firm Permira into a Euro450 million majority stake in Roberto Cavalli (3)) or introduced on the stock market at sky-rocketing valuations, which are ever increasing (Prada, Salvatore Ferragamo, Michael Kors, Brunello Cucinelli).

The technology sector is also back to acquisitive mode in full swing, with Facebook spending USD19 billion (!) to purchase WhatsApp, a cross-platform mobile messaging app for iPhone, BlackBerry, Android, Windows Phone and Nokia, which allows to send text, video, images, audio messages free of charge.

The USD19 billion figure is split between USD4 billion in cash, USD12 billion in shares and USD3 billion in Facebook shares, which will be distributed to the founders and employees of WhatsApp, spread over four years after the closing of the deal. Sequoia, the investment fund which invested USD8 million for 15% of WhatsApp’s capital in 2011, is about to make USD3.5 billion out of this transaction.

Juicy business.

With many sectoral experts saying, and proving, that the creative and cultural industries are the booster to global and, in particular, European, growth and recovery (4), the future looks very bright indeed for all those companies which main assets are theirintangibles (knowhow, intellectual property, brand value, reputation, etc).

2. How to benefit from the bullish market in a tax efficient way

If you have some back pocket money (5), i.e. some money sitting around idly in a savings bank account remunerated between 0.5 percent and 1.00 percent, which you absolutely do not need in the short and medium term and which you would not feel badly hurt if you were losing, now is the time to take advantage of the situation.

The taxman is generous to individuals ready to part with their cash to invest in the creative industries, on both sides of the Channel.

In Great Britain, HMRC is only inclined to give tax credits to individuals, the so-called ‟business angels” who are UK tax residents with an entrepreneurial mind. Enterprise Investment Schemes (‟EIS”), Venture Capital Trust (‟VCT”) and Seed Enterprise Investment Scheme (‟SEIS”) are the three tax tools through which individuals can invest in eligible companies (i.e. companies with no more than 250 employees or gross assets lower than GBP15 million, or GBP200,000 for a SEIS) in a tax efficient way.

Tax breaks are summarised below:

SEIS:

Maximum investment: GBP100,000

Inc tax relief/investment: 50 percent

Holding period: 3 years

Capital gain tax: exemption EIS:

Maximum investment: GBP1 million

Inc tax relief/investment: 30 percent

Holding period: 3 years

Capital gain tax: exemption

VCT:

Maximum investment: GBP200,000

Inc tax relief/investment: 30 percent

Holding period: 3 years

Capital gain tax: exemption

In France, individuals who have to pay the French wealth tax (wittily called ‟impôt de solidarité sur la fortune” (‟ISF”), and invest in SMEs, are also rewarded by the French state.

Through the ‟ISF PME” tax breaks, individuals subjected to the ISF can deduct up to 50 percent of the sums invested in French SMEs, up to Euro45,000 per year (6).

For everybody else who pays income tax in France, a new tax break of 18 percent of the cash invested in a French SME, capped at Euro50,000 per taxpayer per year, has been set up (7).

If the SME you have invested in goes bust, you will still have been able to take advantage of the tax breaks. If the SME produces many sparks and is being acquired, at a later stage, by a private equity investment fund, a competitor or any other third party, the early-stage investor individual will be able to cash in and realise a substantial capital gain on its early investment. In the UK, such capital gain is exempted from taxation, unlike in France. That may explain why there are more than 50,000 business angels in the United Kingdom and around 5,000 (!) in France.

Sadly, corporate venture is not currently actively encouraged by either the French or British governments, which results in Euro230 billion sleeping idly in the coffers of all the companies listed on the French CAC40 index, for example.

More lobbying should be done, by institutions representing the creative industries such as Comité Colbert, Fondazione Altagamma, Walpole and the European Cultural and Creative Industries Alliance, to influence governments to provide tax incentives to companies wishing to invest in SMEs in a tax efficient way.

Positive changes are looming though, since corporate venture should kick off on 1 July 2014 in France, with companies paying taxes in France being able to amortise their corporate venture investments in innovating SMEs over a period of five years (8).

Let’s watch the space and hope that Cameron and Osborne are going to take stock and act accordingly, in the UK soon.

It is time to think carefully how to invest any spare cash that you may have and, with the bright economic outlook and new tax schemes pushed by governments to accelerate growth and recovery, both individuals and corporates have more and more investment options at their disposal, to encourage innovative and creative industries.

(1) Luxury goods worldwide Market Study Spring 2013 Update, Bain & Company

(2) M&A in 2014? Luxury brands on sale or seeking for financial partners, Portolano Cavallo Studio Legale (3) Sources Say Roberto Cavalli Nearing €450 Million Sale to Permira, Business of Fashion

(4) 1er panorama des industries culturelles et créatives, EY, November 2013

(5) Back pocket money, Jimmy C. Newman

(6) ‟Réductions, impôt de solidarité sur la fortune”

(7) ‟Réduction d’impôt pour souscription au capital de sociétés non cotées”

(8) Corporate venture: ‟pour financer l’innovation”

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

Your name (required)

Your email (required)

Subject

Your message

Send Master innovation luxury & design: Crefovi teaches the law of luxury goods at master in luxury management

Crefovi’s founding and managing partner, Annabelle Gauberti, is delighted to teach the students of the Master innovation luxury & design. Crefovi to teach the law of luxury goods and to provide a three hours’ lecture to the students of the Master innovation, luxury & design from the University Paris Est-Marnes-la- Vallée, on the law of luxury goods and fashion on Thursday 6 February 2014.

Crefovi is very proud to soon be teaching fashion intellectual property law and fashion finance law to the students of the best master in luxury management in France.

It’s going to be exciting to interact with the students, have them complete some case studies and short exercises on enforcement of intellectual property rights in the fashion sector. Crefovi strives to contribute to the training and education of young professionals who wish to break into the luxury goods and fashion sectors.

Annabelle Gauberti, Crefovi’s founding and managing partner, is a tutor both at HEC Luxury Certificate and, now, at this Master from the University of Paris Est-Marnes-la Vallée.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

Your name (required)

Your email (required) Subject

Your message

Send

VAT refund and tax free shopping: how to make them even more lucrative for luxury brands?

Tax free shopping, in France alone, had a volume of around 4 billion Euros in 2012, progressing between 25 and 30 percent per year. As Chinese tourists spend around 80 percent of their shopping budget in Paris, in particular atLes ‟ Galeries Lafayette” and ‟Printemps”, tax free shopping, also called VAT refund, is a bonanza for Paris-based luxury brands and department stores, as well as tax free providers such as Global Blue and Premier Tax Free.

Note from the author on VAT refund: Since 13 February 2015, the French circular dated 26 January 2011 on sales to travellers residing in a country which is not part of the European Community or an assimilated territory and on the process of export sales slips has been abolished and replaced by the circular dated 13 February 2015 relating to the sale to travellers residing in a state outside the European Union or an overseas collectivity from the French republic.

Indeed, Chinese tourists have increased their shopping budget by 80 percent, during the same period, spending 1,500 Euros on average per purchase in 2012.

What is tax free shopping exactly? How does it work? Who benefits from it? Below are answers to these questions and more.

1. Legal framework of the French tax free shopping system

1.a. Article 147 of Directive 2006/112/EC of 28 November 2006

Set out in article 147 of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (the “Directive” and ‟VAT”, respectively), the process of export sales slips (‟bordereaux de vente à l’exportation”) allows tourists who have their main residence outside the European Union (‟UE”) to benefit from, under certain conditions, tax removal on exports for purchases destined to their personal use and which are transported outside the EU in their personal luggage.

Point (b) of article 146 (1) of the Directive provides that:

‟1. Member-states shall exempt the following transaction(s):

(…)

(b) the supply of goods dispatched or transported to a destination outside the Community by or on behalf of a customer not established within their respective territory, with the exception of goods transported by the customer himself for the equipping, fuelling and provisioning of pleasure boats and private aircrafts or any other means of transport for private use. (…)”.

Article 147 of the Directive provides that: ‟1. Where the supply of goods referred to in point (b) of Article 146(1) relates to goods to be carried in the personal luggage of travellers, the exemption shall apply if the following conditions are met:

(a) the traveller is not established within the Community;

(b) the goods are transported out of the Community before the end of the third month following that in which the supply takes place;

(c) the total value of the supply, including VAT, is more than 175 Euros or the equivalent in national currency, fixed annually by applying the conversion rate obtained on the first working day of October with effect from 1 January of the following year.

However, Member States may exempt a supply with a total value of less than the amount specified in point (c) of the first subparagraph.

2. For the purposes of paragraph 1, ‟a traveller who is not established within the Community” shall mean a traveller whose permanent address or habitual residence is not located within the Community. In that case ‘permanent address or habitual residence’ means the place entered as such in a passport, identity card or other document recognised as an identity document by the Member State within whose territory the supply takes place.

Proof of exportation shall be furnished by means of the invoice or other document in lieu thereof, endorsed by the customs office of exit from the Community.

Each Member-state shall send to the Commission specimens of the stamps it uses for the endorsement referred to in the second subparagraph. The Commission shall forward that information to the tax authorities of the other Member- states”.

Article 147 of the Directive allows goods not to be taxed twice, in the country where they were purchased and in the import country, the latter being the place of the real consumption of these goods.

EU Member-states can neither forbid tax refunds on exports, nor limit them beyond what is allowed by the Directive.

1.b. Article 262 of the French general tax code

In France, the provisions set out in article 147 of the Directive have been transposed in article 262 of the French general tax code (‟GTC”).

As a preliminary remark, it is worth mentioning the various VAT rates that currently apply in France:

19.6 percent is the standard VAT rate, which applies to the majority of goods and services;

7 percent is the intermediary VAT rate, which applies to the following goods and services, among others: restaurants and sale of pre-cooked food stuff (take-away or on site), hotel accommodation, furnished rentals, classified camping, transport services, certain types of renovation works, agricultural products not destined to human consumption, non-refundable medicines, cinemas, sale of original works of art and copyright, entry tickets to museums, zoos, monuments, exhibitions and cultural sites;

5.5 percent is the reduced VAT rate, which applies, for example, to food products (except chocolate, candy, vegetal fat, caviar, which are taxed at 19.6 percent), non-alcoholic beverages, gas and electricity subscriptions, and

2.1 percent is the particular VAT rate, which applies to medicinal drugs refunded by the French social security, living animals for meat consumption sold to non- producers of meat products, contributions to public entertainment channels and certain press publications.

Goods, which may benefit from the VAT refund process, may fall in the three first VAT categories, at 19.6 percent, 7 percent and 5.5 percent respectively.

From 1 January 2014 onwards, the main French VAT rates will be modified, as follows:

the reduced VAT rate will be lowered from 5.5 percent to 5 percent;

the intermediary VAT rate will be increased from 7 percent to 10 percent, and

the standard VAT rate will be increased from 19.6 percent to 20 percent.

Article 262-I-2º of the GTC provides that deliveries of goods exported or transported by a buyer who is not a resident in France, or on his behalf, outside the European community, as well as service deliveries directly linked to exports, will be exempted from VAT.

Furniture and victualing goods used on cabin cruisers, touristic planes or any other means of transportation with a private use, are excluded from this VAT exemption.

When the delivery relates to goods that are transported within the personal luggage of the travellers, the VAT exemption will only apply if the following conditions are met: a. the traveller does not have his domicile or usual residence in France or any other Member-state of the European Community; b. the delivery does not relate to manufactured tobaccos, goods which correspond to, in view of their nature or quality, commercial supply, as well as goods which are prohibited to exit; c. the goods are transported outside the European Community before the end of the third month following the month during which the delivery was performed, and d. the global value of the delivery, including the VAT, is above 175 Euros (as specified in the French circular (‟circulaire”) dated 26 January 2011 on sales to travellers residing in a country which is not part of the European Community or an assimilated territory and on the process of export sales slips (the ‟Circular”).

1.c. Circular dated 26 January 2011 on sales to travellers residing in a country which is not part of the European community or an assimilated territory and on the process of export sales slips

The Circular explains in details the rules that apply to the process of export sales slips in France.

We have detailed below the key rules that are set out in the Circular.

1.c.i. Export sales slip (‟bordereau de vente à l’exportation”) When a seller, liable to pay VAT, decides to exercise its option to perform the formalities of export sales slips for the benefit of its buyers, in relation to goods destined to exports, this triggers, exclusively, the delivery by this seller, on the day of the sale, of an export sales slip (‟bordereau de vente à l’exportation”) to a buyer of the goods who has his domicile and residence outside the UE.

The process of export sales slips is not mandatory and the buyer cannot impose it to the seller. As mentioned above, it is an option that the seller has, and which it decides to exercise or not.

The seller judges whether it wants to accomplish the formalities of the exemption process and undertake these responsibilities, or whether it prefers to sell at the conditions of the internal market (i.e. at full VAT rate, without any possibility of refunds).

The export sales slip (‟bordereau de vente à l’exportation”) is, all in one, a sales receipt, as well as a simplified export statement (‟déclaration d’exportation simplifiée”) and a statement of the commitment taken by the buyer, who benefits from the VAT refund, to strictly comply with the rules of this exemption process.

Buyers must then present for visa (i.e. review, confirmation of approval and stamping), the export sales slip provided by the seller, as well as the goods that are mentioned in such slip, to the customs authorities of the point of last and definite exit from the EU.

This will be either customs at the exit point in France, if the buyers leave directly France to go to a country that is not in the EU (France – United States, for example), or customs in the last Member-state at the exit point from the EU from another Member-state (France-Belgium-United States, for example).

1.c.ii. Two visa processes Two visa processes coexist in France: the visa by way of stamp from customs and the electronic visa within the PABLO application.

The electronic visa is possible for VAT refund slips, on which are set out the PABLO logo, at those points of exit from the French territory that have been set up with some electronic visa devices (i.e. French airports, which are Roissy-Charles- de-Gaulle, Orly, Marseille-Provence, Nice-Côte d’Azur, Lyon- St-Exupery, Geneve-Cointrin, St-Julien en Bardonneix and Marseille-Port).

As far as electronic visas are concerned, travellers who definitely leave the EU, from an exit point equipped with automatic PABLO terminals, present their slips, on which are set out the PABLO logo, to the PABLO terminals.

Those terminals, usually located close to the customs office in the French airport, read the barcodes set out on the VAT refund slip, on which is set out the PABLO logo. Then, the PABLO terminals provide a ‟CONFIRMED” status to the export transaction of the goods, triggering the electronic visa of such export sales slip.

From whatever exit point located in France, the traveller asks customs to review and confirm the approval of those export sales slips that are not identified with a PABLO logo.

1.c.iii. VAT refund process The seller, in its quality of exporter, must obtain from a printer of its choice, some export sales slips, which comply with the CERFA model nº 10096*03.

Export sales slips must be numbered in continuous series. They contain three identical pages, which must set out mandatory mentions prescribed by decree: the first one is kept by the seller for accounting purposes, the second is to be sent back by the buyer, to the seller, after obtaining the visa, and the third one is for the buyer to keep.

The seller can also use a slip which is in a different format, provided that the content of such slip complies with the provisions set out on the CERFA template model n°10096*03 and that such slip and its content have been reviewed and approved by the Office F/1 from the ‟Direction Générale des Douanes et Droits Indirects”. Their signatures on export sales slips commit both the buyer and the seller to comply with their respective obligations, as set out below.

A – Seller’s obligations

1. Obligations of the seller, whatever way the visa is granted From a tax standpoint, the seller acquires the title of exporter.

In addition to its obligations as an exporter, the seller must proceed to the following operations: a) check the quality of non-resident of the buyer

This check is performed using official documents such as passports, identity cards, consulate cards, etc. b) set out the following mentions:

the number and nature of the official document presented, and

all mentions concerning the buyer’s identity: surname, first name, foreign address, nationality. c) inform the buyer of the process to follow and the possible applicable sanctions in case an irregularity is discovered. Whenever sellers or buyers do not comply with their respective obligations, which are part of this process, customs will refuse to provide the visa on the slip and, possibly, may apply some penalties. d) clearly indicate to the buyer, from the moment during which the export sales slip is drafted, the exact total VAT amount, as well as the amount which will be actually refunded to the buyer, if management fees are billed by the seller and/or refund companies, such as Premier Tax Free and Global Blue (the ‟Refund companies”). The sale transaction becomes effectively exempted from VAT when the seller gets the export sales slip back from the buyer, on which has been set out the visa (either through a stamp provided by French customs, or customs from another Member-state of the EU, or an electronic visa).

However, the seller can provide the VAT refund:

either at the date of the sale, and in this case, the seller takes the risk of losing the benefit of the VAT exemption if its buyer never justifies the export of the purchased goods;

or when it gets back the sales slip approved and stamped by customs or an electronic visa.

The seller is contractually bound to pay its buyer the amount to which it committed, as set out on the export sales slip. e) prepare the export sales slip, which needs to conform with the annexed export sales slip model nº10096*03, setting out its individual VAT identification number, which was attributed to the seller by the French tax authorities. f) mention, precisely and in a readable manner, on the slip, the exact nature and number of sold goods, in order to allow customs to identify them.

Export sales slips must mention, in addition to their own denomination, the brands and manufacturing numbers set out on jewellery pieces in precious stones and on devices that reproduce sound and picture (cameras, camcorders, dvd players, for example).

However, it is possible for the details relating to the purchased goods to be set out on a separate invoice, provided that the export sales slip expressly mentions the reference number of said invoice. The French-language wording, set out on the form, of the declaration and undertaking consigned in the D frame (Buyer), must compulsorily be set out on the export sales slip, as well as its translations in the six following languages: English, Portuguese, Spanish, Russian, Japanese and Mandarin Chinese.

A pre-stamped envelope, on which is set out the seller’s address, must be provided to the buyer, so that the buyer can post an original export sales slip, on which is set out the visa, to the seller.

2. Obligations of the seller and the authorised VAT refund operator within the PABLO application Within the PABLO process, the seller prints, for each transaction, an export sales slip on paper, identified by a PABLO logo and a bar code. To this export sales slip, the seller annexes an explanation notice relating to the conditions to obtain the electronic visa.

The seller then generates the following information and transfers it to the French customs’ database, at least once per day:

transaction identifier (bar code number);

seller’s identity;

buyer’s identity;

buyer’s address;

type of goods (precise denomination);

amount inclusive of all taxes (‟montant TTC”);

VAT amount, and

publication date.

3. Timeframe within which to keep stamped export sales slips The stamped original export sales slip, returned by the buyer to the seller, after obtaining a visa from customs, must be preserved by the seller, in case of tax and customs control, until the end of the third year following the year of purchase of the goods.

The original copy of the export sales slip, created under electronic form, can be preserved in electronic format, until the end of the third year, from the year during which such electronic sales slip was created.

B – Buyer’s obligations

1. Formalities to perform, whatever way the visa is granted The buyer must justify its status of resident outside the EU and sign the confirmation set out on the D frame on the export sales slip, in relation to the performance of the various formalities.

To this effect, he must:

present, simultaneously, the goods and two originals of the export sales slip, for visa by customs, at his point of definitive exit from the EU, before the end of the third month following the month during which the purchase was performed;

transfer by himself, outside the EU, in his luggage, the goods which benefit from the VAT refund. This process does not allow the intervention of a third party. Therefore, the buyer cannot transfer the goods through a forwarding agent, a diplomatic pouch, the post office, etc.

If one of these conditions is not complied with, customs will refuse to stamp and put a visa on the export sales slip(s). 2. Formalities to perform, within the frame of the PABLO application The buyer, in possession of his goods, will proceed, by himself, to the electronic visa of the PABLO marked export sales slips, at one of the PABLO terminals with optical reading available in public areas and close to a customs’ office in French airports.

This action provides a ‟CONFIRMED” status to the transaction of exportation of the goods and equals to the electronic visa of the export sales slip.

1.c.iv. Final provision of the VAT exemption

A. In a manual process French customs provides the buyer with two originals, original n. 2 (to be posted back to the seller after the visa) and n. 3 (which is a stamped original that justifies the execution of all customs formalities).

It is the buyer’s responsibility to send original n. 2 of the export sales slip, which now has a visa, to the appropriate seller, within six months following the sale.

B. In the PABLO process The electronic visa confirms the reality and occurrence of the export and clears the export sales slip in the dedicated database.

This status grants to the seller the final benefit from the VAT exemption.

The buyer does not have to send to the seller original n. 2 of the export sales slip.

1.c.v. Controls

A. Immediate controls In adequacy with the Directive, the benefit from VAT refund is subordinated to the visa stamping of the export sales slip (‟bordereau de vente”), or of a document that is equivalent to an export sales slip, by customs at the point of exit from the EU.

It is the responsibility of customs’ agents, to whom the manual or electronic visa of export sales slips is requested, to check that:

the export sales slips are valid;

the buyer has a non-resident status;

all the goods set out on the export sales slips are really being exported;

the nature and value of the goods do comply with the authorised nature and quantities, set out in paragraph II-3 of the Circular (goods excluded from the process);

the travel ticket presented by the buyer confirms that the buyer will be travelling directly to a country outside the European Union;

the export sales slips with a PABLO logo, stamped with an electronic visa;

the visa is manually stamped on standard export sales slips, when all the conditions are met, and

a visa be manually stamped, on a PABLO export sales slip, when the PABLO terminals are not functioning properly.

When the customs officers find some irregularities, they may decide to refuse to provide the visa, to invalidate the export sales slip or to inflict a penalty in application with the French customs code.

B. Ex-post controls Some ex-post controls on the regularity of VAT refund operations may be performed by customs agents, at the head office of sellers and/or the Refund companies, in application with the French customs code.

A dedicated team has been set up, entitled ‟Service d’enquêtes de la Direction Nationale des Recherches et des Enquêtes Douanières” (‟DNRED”), by the French customs authorities, to perform such ex-post controls.

To conclude on the framework relating to the French VAT refund system, meticulously described in the Circular, there are many options available to French shops (sellers), as follows:

sellers may prefer to sell only at internal market conditions (at the same prices than those paid by tax- residents of the EU, i.e. without providing any VAT refund services); or

sellers may exercise their option to provide VAT refund services to their buyers who are not tax-resident in the EU. In this instance, they may decide to:

enter into a private bilateral and exclusive contractual arrangement, with a professional VAT refund services provider that is active on the French market; or

organise the VAT refund themselves, by manually providing some export sales slips to their buyers (by getting the printed templates of export sales slips at their closest chamber of commerce or authorised printers); or

organise the VAT refund themselves, by using the electronic process PABLO Indépendants. 2. The beneficiaries of the VAT refund market in France

I understand from the French customs, tax and politics authorities, that the current French framework of VAT refunds is unlikely to change in the near future. As set out in the answers to the written questions n. 32263 and n. 13548 asked at the French National Assembly, on 15 June 2010 and 12 February 2013, France is the first touristic destination in the world. France is increasingly sought after, as THE shopping destination of choice for travellers coming from all over the world. Foreign tour operators include shopping activities in France as part of the attractions in the trips that they propose to their clients. In this context, VAT refunds are an advantage, which is often mentioned in order to boost touristic revenues, for which France stands in the rd3 place, worldwide, behind the United States and Spain. Paris remains at the first European place as far as touristic shopping is concerned, well ahead of London and Milan (76 percent of tax free shopping is done in Paris, 10 percent in the rest of the Ile-de-France region, 7 percent in the French Riviera, 2 percent in the Alps and 5 percent elsewhere in France).

Tightening the legal framework on VAT refunds, and in particular the conditions which apply to these VAT refunds, may trigger an eviction effect of the purchases made by tourists to foreign member-states, in particular Germany and Great Britain. For all these reasons (compliance with the Directive, beneficial effect of the VAT refunds on the business of French sellers and shops), the French congress does not want to amend these rules.

I understand that the only foreseeable change to the current French framework on VAT refunds is that the PABLO process will become compulsory from 1 January 2014. Therefore, all shops will have to use PABLO marked export sales slips, from 1 January 2014, and an electronic visa will be stamped, on these PABLO marked slips, by the PABLO terminals with optical reading, or a visa will be manually stamped, on a PABLO export sales slip, when the PABLO terminals are not functioning properly.

3. Possible solutions to enter the VAT refund market in France

It is important to note that there are no particular legal conditions or state approval requirements, to be complied with, or obtained, by any company that wants to become a tax refund services provider in France.

Unlike banks or financial institutions, a Refund company, i.e. a tax refund services provider, does not need to be registered with, or approved by, the ‟Autorité des Marchés Financiers” or any other French public institution or regulator. The only requirement is that the new tax refund services provider finds some clients on the French private market, i.e. some shops or sellers that agree to enter into a business relationship and bilateral contractual partnership with the new tax refund services provider. The tax refund services sector is unregulated and free for any new entrant to enter, provided that the provisions set out in the Circular and the template CERFA model n°10096*03 are complied with by such new entrant.

Therefore, to conclude, I think that, at this stage, the best way to enter the tax refund market in France, is to:

either contact some French shops, which have no agreement in place with any other tax refund services provider and/or Refund company, and which may be susceptible to attract and appeal to tourists, and negotiate with those French shops a partnership relating to tax refund services, or

provide better and more attractive commercial terms to French sellers (shops), which are already bound by the terms of a contractual relationship with other tax refund services providers, such as leaders on the Refund companies’ market, Global Blue and Premier Tax Free.

I think that these are the two ways in which one should be able to attract new French shops to partner up to offer tax refund services at very attractive rates, to tourists.

To penetrate the French tax refund market, one must first enter into bilateral contractual relationships with attractive French shops before offering tax refund services to tourists who come to France.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

Your name (required)

Your email (required)

Subject

Your message

Send Crefovi presents ‟Law & luxury” course at business school HEC

Annabelle Gauberti, founding and managing partner of London law firm in the law of luxury goods Crefovi, presented a ‟Law & luxury” course to the MBA and Master students of French business school HEC, who are enrolled in the Luxury Certificate.

On 7 June 2013,Annabelle Gauberti, founding and managing partner fo Crefovi, presented to the master and MBA students of HEC Luxury Certificate the specificities of luxury law, in her ‟Law & luxury” course.

The ‟Law & luxury” course, presented during HEC Luxury Certificate, was filmed: watch the videohere !

This emerging legal discipline covers legal issues relating to intellectual property, financings and private equity transactions, licensing and distribution agreements, as well as the fight against counterfeiting and the opportunities represented by e-commerce.

Annabelle is an expert in luxury and fashion law, which she started practising back in 2003. In May 2004, she curated the publication, and co-wrote, the Law of luxury goods supplement (‟Droit du luxe”).

Within the scope of her practice at London fashion law firm Crefovi, she regularly advises luxury houses, brands, fashion companies, creative designers, retailers, contractors of luxury houses, models on their business and legal issues.

Her clients are based in the United Kingdom, France, the rest of Europe, the Middle East, North America and Asia.

Annabelle Gauberti, founding partner of Crefovi, will tweet her impressions and pictures on @crefovi, so please stay in tune with Crefovi on Twitter.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

Your name (required) Your email (required)

Subject

Your message

Send

Fashion business partnerships & investment: IP as a business asset

London fashion law firm Crefovi and Own-it, an institution which offers intellectual property advice for the creative sector, hosted a free webinar on Fashion‟ business partnerships and investment: IP as a business asset”, on 13 February 2013.

You will need initial funding to create your first, second or even third collection and set up your business. While family and friends, grants and loans can be a source of financing, don’t underestimate the value of intellectual property – yours and other people’s – in the context of securing funding for your fashion business. We study the available fashion business partnerships & investment, in this webinar.

In this one-hour webinar, we will cover:

the different available funding sources;

your business plan – key considerations;

attracting third party financial investment – and the important role of intellectual property (‟IP”);

other types of investment, e.g. creative partners, who are crucial to your business success, and how you can pay them;

key clauses in partnership or equity finance agreements, and

next steps after you secured funding.

Speaker: Annabelle Gauberti, founding and managing partner of London fashion law firm Crefovi (whose profile is set out below).

The webinar ‟Fashion business partnerships & investment” is moderated by Silvia Baumgart, Own-it Programme manager.

When: 13 February 2013, 12:00 to 13:00 (GMT)

Where: on your computer, by way of webinar

Annabelle Gauberti, founding and managing partner, London fashion law firm Crefovi Annabelle has more than 10 years of experience practising the law of luxury goods and fashion as well as media & entertainment law, both in the United Kingdom and France. Annabelle has set up her own boutique law firm, Crefovi, in order to provide tailored legal advice to the creative industries.

Her clients base includes fashion houses, designers & models, artists, art galleries & museums, musicians, film production companies.

Annabelle’s roster of creative clients appreciate, above all, her ability to understand and solve their legal issues in a timely manner, by providing realistic, customised and effective solutions.

She is steeped in finance and corporate law, and has been involved in many matters, either contentious or non- contentious, relating to intellectual property, trademark litigation, selective distribution, franchising, tax and media & Internet law.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

Your name (required)

Your email (required)

Subject

Your message

Send