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News & Tips

E-Payment - New obligation

From 01/12/2015, e-payment ["télérèglement"] will become mandatory for all non-resident companies having their bank accounts in foreign banking institutions that accept SEPA B2B direct debits. As from that date, VAT payment will be debited automatically and directly by French VAT authorities when submitting the VAT return. All foreign companies must therefore register their banking details on the French authorities site and provide along a signed authorization from their bank. VAT returns relative to the month of November are already concerned. Although some leniency might be apply for a short transition period, failure to comply with this new obligation will imply an administrative fine of 0,2% of the VAT due [with a minimum of 60 EUR].


Deferred payment on import

Since 01/01/2017, it has become possible for all EU companies and non-EU companies to request the deferred payment through a formal authorization provided several conditions are met.


VAT return - Periodicity [Tip]

Your company has to report its VAT position by filing periodical VAT returns on a monthly basis if your annual turnover exceeds € 777.000 [goods] or € 234.000 [services] or if you have opted for. However, you are allowed to submit VAT returns on a quarterly basis where your annual tax liability is under € 4.000. Under specific conditions, some companies may benefit from a seasonal filing regime allowing filing VAT returns only in respect of month during which transactions are performed. Simplified scheme enabling companies to file their VAT return on an annual basis is not applicable to foreign companies.


 More VAT News & Tips - France

DOING BUSINESS IN FRANCE [FR] - VAT GUIDE

 

General

VAT Directive

France

What is the structure of the VAT number?

Each individual VAT identification number shall have a prefix in accordance with ISO code 3166 - alpha 2 - by which the Member State may be identified.

 

French VAT numbers have 13 characters [FR + 11 digits]. The last 2 digits constitute a control number.

 

What is the local name of the tax?

 

Taxe sur la Valeur Ajoutée [TVA]

 

VAT rate

VAT Directive

France

 VAT rates

Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services.

Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.

 

France applies a standard VAT rate of 20% and three reduced VAT rates: 2,1%, 5,5% and 10%.

 

See VAT rates applied in the EU

VAT return

VAT Directive

France

How is the tax period determined? 

The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided those ones do not exceed one year. 

Monthly/Quarterly

Under the normal regime, your company has to report its VAT position by filing periodical VAT returns on a monthly basis.

Quarterly or seasonal filing can  also be opted for under conditions.

 

When should periodical VAT return be filed?

The VAT return shall be submitted by a deadline to be determined by Member States.

That deadline may not be more than two months after the end of each tax period.

 

For foreign companies, monthly or quarterly VAT returns are due on the 19th day of the month following the end of the tax period.

Statement

VAT Directive

France

Annual recapitulative statement

Is this requirement laid down in the country and what is the filing deadline?

Member State may require  taxable persons to submit a return in respect to all transactions carried out in the preceding year.

That return shall provide all the information necessary for any adjustments.

 

Your company is not required to file any summarizing annual VAT return in France.

Recapitulative statement of intra-EU supply of goods [European Sales Listing - ESL]

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement shall be drawn up for each calendar month.

However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency.

The recapitulative statement shall be submitted within a period not exceeding one month.

 

The recapitulative Statement [D.E.B.] must be drawn up for each calendar month and submitted to French VAT authorities by the 10th of the month after the end of the reporting period [month].

Filing the Statement on a quarterly basis is not possible.

Payment

VAT Directive

France

What is the payment deadline?

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. 

Member States may, however, set a different date for payment of that amount.

 

 

VAT due should be paid by the filing deadline for the VAT return.

Are interim payments required?

Member States may require interim payment to be made.

 VAT due should be paid by the filing deadline for the VAT return.

 

VAT refund

VAT Directive

France

VAT refund for companies VAT registered in the country.

Is any VAT credit automatically carried forward or refunded?

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.

 

A VAT credit is in principle automatically carried forward to the next tax period, unless a tax refund has been applied for. 

Special measures for foreign companies

VAT Directive

France

Optional reverse charge [art. 194 of the VAT Directive] for non-resident supplier.

SUPPLY OF GOODS

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Yes

Reverse charge mechanism is applicable on all domestic supplies of goods carried out by a non-established supplier [whether he is VAT registered or not in France] provided the recipient is VAT registered in France.

 

Optional reverse charge [art. 194 of the VAT Directive] for non-resident provider. 

SUPPLY OF SERVICES

Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.

Yes

Reverse charge mechanism is applicable on all supplies of services carried out by a non-established supplier [whether he is VAT registered or not in France] provided the recipient is VAT registered in France.

Have simplification measures been taken to avoid registration of the foreign company for the goods held on consignment in the country?

 

 No

Do special arrangements apply to "call-off-stock"?

 

 Yes

 

Triangulation can be applied when the middleman (B) is VAT registered [as a non-established company] for others supplies in the 3rd country [Member State of destination]?  

Triangulation regime ABC cannot be applied when the middleman B is also VAT registered in France [Member State]. Furthermore, triangulation scheme is not applicable in chain transaction involving four or even more parties.

 

VAT on import

VAT Directive

France

VAT warehousing regime

Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.

 

Yes

France has introduced VAT warehousing regime.

VAT on importation – Postponed accounting via the VAT return.

Is it possible for a company to pay the import VAT via the periodical VAT return?

Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return  to be submitted.

 

Yes

Since 01/01/2015, a new postponed accounting via the VAT return is available in France. Under specific authorization [“Procedure de domiciliation unique”] payment of French VAT on import could be postponed into the VAT return.

 

A deferred payment for VAT and customs [similar delay] is however possible under specific conditions ["crédit d'enlèvement"].

 

Miscellaneous

VAT Directive

France

Intrastat Threshold  

Dispatches: N/A

Arrivals : € 460,000

Distance Sales - Threshold  

 € 35,000

See various thresholds applied in the EU [last update :01/03/2014].

 

Ministry of Finance   website

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