VAT in the Republic of France

France is a member of the European Union (EU) and draws up its tax rules according to the laws or directives issued from Brussels by the EU. The current VAT directive applies to all 27 member states of the European Union, and it governs the rules on VAT compliance, and in some part, covers the setting of VAT rates.

As an EU member state, France is obliged to implement the VAT directives, which provides guidance on VAT. Where there is a conflict, the European Union’s directive takes precedence. France is a member of the European single market economy and uses the Euro (€) for its currency. In France VAT is known as: TVA, or Taxe sur la Valeur Ajoutée.

VAT registration in France

Both EU and non-EU businesses may trade in France without establishing a local presence. This is known 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 VAT registration is permitted. Common scenarios that require 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;
• Buying goods within France that are subsequently re-sold in-country;
• Selling goods from France to other EU member states;
• Distance-selling to private individuals in France, e.g. internet retailing or trading through an e-commerce platform.

The rules on French VAT registration were tightened in September 2006, 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. Registering for French VAT generally takes four weeks, although this can vary.

French VAT compliance

There are detailed rules controlling the recording and processing of xx transactions for VAT purposes. This includes guidelines on:

• French invoice requirements;
• Foreign currency reporting;
• Credit notes and corrections;

French VAT rates