VAT OBLIGATIONS IN FRANCE
How is the tax period determined in France?
Under the normal regime, your company has to report its VAT position by filing periodical VAT returns on a monthly basis. Quarterly filing can also be opted for under conditions.
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 (no more possible since 01/10.2018). Simplified scheme enabling companies to file their VAT return on an annual basis is not applicable to foreign companies.
When should periodical VAT return be filed?
For foreign companies, monthly or quarterly VAT returns are due on the 19th day of the month following the end of the tax period.
Since 01/10/2014, e-filing [télédéclaration”] is mandatory for all companies for VAT return and VAT refund. For the payment of VAT, e-payment [“télérèglement] will be also mandatory for foreign companies as from 01/12/2015.
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. 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.
Is this requirement laid down in the country and what is the filing deadline?
Your company is not required to file any summarizing annual VAT return in France.
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.
Are quarterly filings allowed by the country and what is the filing deadline?
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.
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.
What is the payment deadline?
VAT due should be paid by the filing deadline for the VAT return. For the payment of VAT, e-payment [“télérèglement] is mandatory for foreign companies since 01/12/2015.
Are interim payments required?
Interim payments are not required.
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. Member States may require interim payment to be made.
Is any VAT credit automatically carried forward or refunded?
A VAT credit is in principle automatically carried forward to the next tax period, unless a tax refund has been applied for. Businesses may apply for a refund of their VAT credit if it exceeds €760.
VAT on expenses – Limitation
The expenditure for which you are claiming VAT must be for the purposes of your business activity. The main exceptions for which VAT cannot be claimed are:
- Accommodation expenses incurred by your business for your staff and executives. However, expenses paid for third parties are accepted in certain circumstances;
- Expenditure on passenger vehicles and related services;
- Fuel, apart from diesel (80% of VAT can be claimed for the vehicles listed above) and liquefied petroleum gas (LPG) and natural gas (50% of VAT can be claimed for the vehicles listed above).
VAT on petrol
Up to now, only VAT on diesel fuel was partially recoverable [80%]. VAT on petrol was not recoverable. Since 01/01/2017, companies have been able to recover 10% of VAT on petrol. This percentage will gradually increase in the coming five years. The percentage is 40% for 2019 and 60% for 2020.
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.