VAT in France is called taxe sur la valeur ajoutée – TVA. VAT was first introduced in France in 1954. Currently, French VAT law is contained in the main tax code called “Direction Générale des Douanes et Droits Indirects” (Directorate General of Customs and Indirect Taxes). This law is based on regulations created by the EU, where France is one of the founding countries.
VAT registration – when is it necessary?
Registration for VAT for both French and EU entrepreneurs is required in France when a company carries out:
- Mail order sales to private individuals, such as online retailing, including platforms such as Amazon and Ebay
- Selling goods from France to other European countries
- Storing goods in a French warehouse as inventory for resale for more than three months,
- Importing goods into France
- Organisation of live events, conferences and similar events in France
- Supply and installation services for longer than 12 months
In the case of ordinary and mail order sales to companies (entities registered for VAT in France) by non-French companies, according to French regulations, a so-called self-assessment of VAT should be carried out.
VAT in France – French VAT Rates, Process, Due Dates
The standard rate of VAT in France is 20% and this covers all services and goods that are not subject to reduced rates.
In addition, there are as many as three reduced VAT rates in France, namely 10%, 5.5%, 2.1%.
- The reduced rate of 10% applies to unprocessed agricultural products, firewood, transport of persons, social housing, renovations to improve the standard of households (housing).
- The reduced rate of 5.5% covers food, books as well as electricity and gas.
- The reduced rate of 2.1% is a special rate that covers: sales of live animals for slaughter, certain cultural events and press publications, medicines covered by state reimbursement.
VAT treatment in France
The way VAT is calculated in France depends on the type of business and the annual turnover of the company. If a business exceeds €760,000 they must file an electronic version of their VAT return. VAT returns are submitted monthly, quarterly or annually to the SIR (service des impôts des entreprises) or DGE (direction des grandes entreprises). VAT returns in France must be sent by the 19th of the following accounting period.
VAT refund for a foreign company in France
As a foreign company trading in France and registered for VAT there, you will receive a VAT refund in case of overpayment. In case the company is not able to obtain the French VAT registration but at the same time makes taxable supplies in France or charges the French VAT rate on domestic goods or services, it can obtain the VAT refund.
What information is required to obtain a French VAT number and registration?
The French tax authorities require the completion of the appropriate forms and the submission of the following documents:
- a VAT certificate, which is proof that the company is registered for VAT elsewhere than in the European Union (if applicable),
- the company’s articles of association,
- an extract from the company’s national commercial register.