1 January 2014 update
French VAT rules, governing VAT registrations, numbers and VAT returns, are based on regulations drawn up by the European Union, of which France was a founding member. The French VAT rate, read about a proposed increase, is currently 20. As member state of the EU, France is obliged to implement the VAT Directives, which provide guidance on VAT compliance rules across Europe. Where there is a conflict, the European Directive takes precedence - see also France VAT rules.
Click here for free guidance on French VAT registration and returns - including fiscal representation.
France VAT Law
The French VAT law is contained within the General Tax Code. It is administered by the Direction Generale des Douanes et Droits Indirect.
French VAT Registration
With the implementation of the European Single Market Initiative in the 1990's, it is possible to buy and sell goods without a local company – know as non-resident VAT trading. There is no VAT threshold in France for the registration of non-resident traders – but you will need one to record transactions and your French customers will want proof that you have obtained one.
There are strict rules on the situations where a registration is permitted. Common scenarios which require a French VAT registration include:
- Importing goods into France;
- Organising live events, conferences etc in France;
- Holding goods in a warehouse in France as stock for resale longer than 3 months;
- 'Supply and install' services over 12 months;
- Selling goods from France to other EU countries; and
- Distance selling to private individuals, e.g. internet retailing.
In Sept 2006, the rules on French VAT registration were tightened, broadly excluding VAT registrations to non-French companies where the final customer has a live French VAT registration themselves. Under this scenario, the reverse charge should be applied.
If you are importing into the EU via France, click here for special details of how to clear goods through customs.
Registering for French VAT generally takes 4 weeks, although this can vary.
French VAT Fiscal Representative
EU companies are no longer required to appoint a full VAT fiscal representative to represent them to the French tax authorities. However, non-EU companies do. Since the start of 2013, a new regime permitting companies from certain non-EU countries to avoid this requirement was launched. If the home state of the non-EU company has signed a mutial assistance agreement with France, then the obligation is dropped.
French VAT Compliance
There are detailed rules controlling the recording and processing of French transactions. These include guidelines on:
- French invoice requirements;
- Foreign currency reporting and translation; and
- Credit notes and corrections.
French VAT Rates
The standard VAT rate in France is 20%. There are reduced rate of 5.5% and 10%. There is also a 2.1% VAT rate for goods from chemists and some newspapers.
There are many variations to the rates above, including exempt taxable supplies. Please contact us to learn more:
French VAT Returns
Companies with a French VAT number must submit regular returns detailing all taxable supplies (sales) and inputs (costs). Generally, returns are submitted monthly in France. VAT returns in France are due by the 19th of the month following the reporting period.
French Intrastat and EC Sales Lists
In addition to VAT returns in France, companies may be required to submit additional statistical information. The French Intrastat and EC Sales list is combined into one filing, the DEB. It should be filed ten days after month end.
French VAT Refunds
If a foreign company is providing taxable supplies in France, but unable to obtain a French VAT number, or simply incurring French VAT on local goods or services, then French VAT may recovered through a VAT reclaim.
For more details, click here to read about our VAT Recovery service.
To talk about our French VAT services, enquiries should contact TMF’s UK office, which co-ordinates TMF's European VAT services. TMF has offices in Paris.
+44 (0)870 067 8881