VAT in France – a complete guide. Rates and registration thresholds | VAT in Europe #10

VAT in France (known as Taxe sur la Valeur Ajoutée or TVA) was introduced as early as 1954, making it the first VAT implemented in Europe. France thus preceded Germany and, subsequently, other member countries of the European Union.

The adherence to French VAT regulations, encompassing aspects such as registrations, declarations, the Intrastat system, DEB, ESLs, and more, relies on European Union directives. France integrates these directives into its General Tax Code. The local Directorate of Tax Legislation, along with regional tax offices, is responsible for supervising VAT compliance.

Should you register as a taxpayer VAT in France?

The term “non-residents” refers to foreign businesses that intend to supply goods or services to local consumers or companies within the country. Non-residents are subject to French VAT regulations, necessitating mandatory registration for French VAT. Therefore, businesses from outside France must adhere to all regulations related to invoicing, VAT rates, and properly remit French VAT.

Some trade situations require businesses to deal with French tax authorities. This is due to the generally accepted VAT rules of the European Union. The following situations can be distinguished:

• importing goods into France when the customer is not a French company registered locally for VAT (reverse charge obligation),
• accumulating consignment stock in French warehouses for a period longer than 3 months,
• organizing live exhibitions, training sessions, and various paid cultural events,
• selling goods online to French consumers for an amount exceeding 42,000 PLN,
• delivery of goods conducted independently,
• selected leasing services.

Only a limited number of companies are subject to mandatory VAT registration. When providing services to French companies, you can take advantage of the reverse charge process. This option is made possible by changes introduced under the VAT Package of 2010.

Registration for VAT in France

The VAT registration threshold is zero for foreign companies trading in France that have registered as VAT/GST taxpayers in their home country.

Is a French fiscal representative or agent required?

According to EU VAT directives, companies are not required to be represented by a local fiscal representative or agent. However, this only applies to companies based in any of the EU member states. A fiscal representative who shares responsibility for VAT restrictions is required for companies outside the EU.

What information is required to obtain a French VAT number and registration?

The French tax office requires filling out the appropriate forms and providing the following documents:

• VAT certificate, which serves as proof that the company is registered as a VAT payer outside the European Union (if applicable),
• articles of association of the company,
• extract from the national trade register of the company.

Where do you submit French VAT registrations?

When a foreign company registers to obtain a French VAT number, it must submit an application to the Service des Impôts des Entreprises. This must be done within two weeks of starting business activity or exceeding the specified VAT registration threshold.

There are no penalties for delays in registering for a French VAT number. However, interest is charged on the VAT due.

French VAT returns

Regular submission of VAT returns is required in France for non-resident taxpayers who have been assigned a VAT number. They are required to report transactions subject to taxation in France, as well as report any VAT refunds due. Form CA3 is used for this purpose.

How often are French VAT returns required?

The reporting periods in France are divided into the following thresholds:

• monthly VAT returns – all entities registered as VAT payers start with submitting monthly returns (this does not apply to businesses subject to the special scheme rules).
• quarterly VAT returns – in the future, if annual VAT liabilities are less than 4,000 euros (then reporting periods can be shortened), some industries and types of activities are exempt from VAT returns. Their reporting can only be done on an activity basis.
• annual VAT returns – for businesses eligible for the simplified VAT accounting scheme.

However, in practice, tax authorities will adhere to their judgments.

What are the final deadlines for submitting French VAT returns?

Each monthly or quarterly VAT declaration for a non-resident tax company is due by the 19th of the month following the end of the period. It’s crucial to meet these deadlines, and any owed French tax must be paid at the same time.

What French VAT can be deducted?

In France, businesses registered for VAT (Value Added Tax) have the option to deduct the VAT they owe on their sales from the VAT they are charged on their purchases (including deliveries) within France.

It applies to VAT paid on imported goods. Examples of VAT deduction include:

• accommodation and client travel costs (employee expenses can’t be deducted).
• business gifts under 60 euros,
• advertising,
• VAT on imports,
• VAT on purchases of goods for resale,
• VAT on capital expenditures.

VAT rates in France

RATE	TYPE	TYPE OF GOODS OR SERVICES
20%	standard	all goods and services not covered by the lower VAT rate,
10%	reduced	some foods, some non-alcoholic beverages, some pharmaceutical products, domestic passenger transportation, Intra-community and international road transportation (some exceptions) and inland transportation. admission to certain cultural events, admission to amusement parks (with a cultural aspect), paid/cable television, some renovations and repairs of private residential buildings, some cleaning work in private households, some agricultural supplies, accommodation in hotels, restaurants (excluding alcoholic beverages), some household waste collection, some home care services, firewood, takeaway food, bars, cafes, and nightclubs (excluding the supply of alcoholic beverages) cut flowers and plants for decorative purposes, writers and composers etc., some social housing, some works of art, collectibles, and antiques,
5,5%	reduced	some foods, some non-alcoholic beverages, school cafeterias, water supplies, medical equipment for disabled persons, books (standard rated only if violent or pornographic content), some e-books, admission to some cultural services, some social housing, some renovations and repairs of private residential buildings, admission to sports events, some housekeeping services, cut flowers and plants for food production, women’s sanitary products,
2,1%	reduced	some pharmaceutical products, some newspapers and magazines, subscription fees for using public television, admission to certain cultural events, some livestock intended for food,
0%	zero	some pharmaceutical products, some newspapers and magazines, subscription fees for using public television, admission to certain cultural events, some livestock intended for food.

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