VAT GUIDE IN FRANCE
FRENCH VAT GUIDE FOR BUSINESSES
Value Added Tax (VAT), known in France as Taxe sur la Valeur Ajoutée (TVA), is a consumption tax applied to most goods and services sold in the country. It is the principal source of tax revenue for the French government and follows the framework established by the European Union VAT Directive.
Menu
VAT Rates
Standard rate: 20% Applied to most goods and services.
Reduced rate: 10% Applied to restaurant services, some renovation works, public transport.
Reduced rate: 5.5% Applied to food, books, certain medical equipment, some energy improvements.
Super-Reduced rate: 2.1% applied to newspapers, medicines reimbursed by social security, TV license fee.
Zero Rate: 0% for Intra-community and international exports (conditions apply).
Who Needs to Register for VAT?
Businesses established in France exceeding the threshold of €85,800 (goods) or €34,400 (services).
Non-resident businesses supplying taxable goods or services in France (no threshold).
Companies involved in intra-community acquisitions.
Online sellers surpassing EU-wide thresholds or using OSS (One-Stop Shop) for distance sales.
All importers to France.
VAT Obligations
The company should charge VAT on invoices where its applicable.
The company should issue compliant invoices.
It needs to submit periodic VAT returns (monthly/quarterly).
Also maintains proper records for at least 6 years.
Intrastat/EC Sales List need to be filed for intra-EU transactions.
Do not forget that reverse charge applies in specific B2B scenarios (especially for non-resident suppliers).
VAT Deadlines
Monthly VAT Returns: For French and non-EU companies, VAT payments must be made between the 15th and 24th of the month following the end of the reporting period. The exact due date varies based on factors such as the type of legal entity and the country of establishment of the taxable person.
For EU-based entities, VAT payments are due by the 19th of the month following the close of the reporting period.
The recapitulative VAT statement: serves to verify that taxable persons are complying with intra-Community VAT regulations. Submitting this declaration is a prerequisite for claiming VAT exemption on intra-EU goods deliveries. It must be filed within 10 working days following the month in which VAT became due for intra-Community supplies of goods, or the month during which the goods were moved for other types of transactions.
Supplementary filings : Intrastat (DEB): Generally due 10th working day of the following month.
VAT Refund
Non-established businesses not registered for VAT in France can recover French input VAT, similar to VAT-registered businesses.
For EU businesses (under EU Directive 2008/9/EC): Eligible if they:
- Have no fixed establishment or residence in France.
- Made no taxable supplies in France during the refund period.
Specific French rules:
- Minimum refund: €400 (quarterly) or €50 (annually).
- Claims must be submitted by 30 September of the following year.
- A French VAT ID (for Intrastat only) doesn’t disqualify a business from using the 8th Directive, if conditions are met.
For non-EU businesses (under EU 13th Directive): All non-EU countries are eligible.
Specific French rules:
- Claims must be submitted by 30 June of the year following the tax year – this deadline is strictly enforced.
- Claim period: 3 months minimum, 1 year maximum.
- Minimum refund: €400 (quarterly) or €50 (annually).
- Claims must be in French and submitted electronically.
- A taxable representative in France is required.
Key Differences:
- EU deadline: 30 September
- Non-EU deadline: 30 June
- Non-EU applicants need a French representative; EU applicants do not.
Penalties for non-compliance
Late VAT Registration:
No specific penalty, but interest and penalties apply if it leads to late VAT payment or missing returns.
Late VAT Payment & Filing:
5% penalty for late payment.
10% for late submission without a formal notice.
40% if filed over 30 days after a formal notice.
80% in cases of secret activity.
Interest charged at 0.2% per month since 1 January 2018.
Electronic Filing/Payment Failures:
0.2% penalty (min. EUR 60) if obligations aren’t met.
Intrastat Reporting:
EUR 750 for late filing, rising to EUR 1,500 after 30 days post-warning.
EUR 15 per omission/inaccuracy (max. EUR 1,500 per return).
EUR 1,500 for refusal to provide requested information.
Errors in Filing:
0.2% penalty for not declaring/paying VAT electronically.
EUR 15 per missing mandatory invoice detail.
Change of Registration Details:
No penalties for late or missing updates.
Common VAT Terms
- TVA (Taxe sur la Valeur Ajoutée) ==> Value-Added Tax
- Numéro de TVA intracommunautaire ==> EU VAT number
- Facture ==> Invoice
- Auto-liquidation ==> Reverse charge
- Régime réel normal/simplifié ==> Standard/Simplified VAT regime
- BIC/BNC ==> Types of income (industrial/commercial or non-commercial)
- DEB (Déclaration d’Échanges de Biens) ==> Intrastat declaration
- CA3/CA12 ==> VAT return forms
