VAT in France (French VAT Rates & VAT Compliance)
Our guide here is specifically crafted for e-commerce sellers in Europe looking to understand and navigate the VAT (value added tax) landscape in France.
From VAT registration to filing and understanding the various VAT rates, this guide provides everything you need to know to be compliant with French VAT regulations.
French VAT rates and VAT compliance
French VAT rates
France, like other EU member states, has its own set of VAT rates that must be correctly applied by companies operating within its jurisdiction. The standard and reduced VAT rates in France are as follows, with the reduced rate also applying to some goods and services.
| Rate | Type | Goods or Services |
|---|---|---|
| 20% | Standard | The standard VAT rate for most goods and services. |
| 10% | Reduced rate | The 10% VAT rate applies to goods and services, including some pharmaceutical products, transportation and tourism-related activities. |
| 5.5% | Reduced | Includes food products, energy products and books, among other essential goods. |
| 2.1% | Super reduced rate | Limited to medical drugs reimbursed by Social Security, and for some live events, newspapers and TV licenses, belonging to goods and services under the reduced rate. |
| 0% | Zero | The zero rate is for Intra-community supplies, exports and certain international transportation services. |
VAT returns & VAT registrations in France
Register for VAT in France
For e-commerce businesses expanding to France, VAT registration is a necessary step to comply with the VAT rules in France and in the EU. Here’s how you can register for VAT in France:
Direct Registration: You can register for a VAT number in France directly with the French tax authorities, if you have a place of business in France.
Non-EU Businesses: Those that are not established in France (permanent establishment) often must appoint a fiscal representative to handle VAT matters.
Registration Number: Upon successful registration, you will be assigned a French VAT identification number.
VAT Returns in France
Once you’re VAT registered in France, VAT returns must be submitted periodically and are generally filed monthly in France. Payment of VAT is due on the 19th of the month.
Here are key points to remember:
Electronic Filing: You can file a French VAT return online through the tax authority’s official portal.
Filing and Payment: Timely submission of VAT returns and payments is crucial to avoid penalties. You can pay the VAT digitally.
Fines and other (tax) consequences
Fines for non-compliance with French VAT regulations can be quite strict:
Infraction Type | Penalty Description | Fine Amount / Penalty |
Late Filing | Failure to file VAT return on time | Fines up to €15,000 or 5% of the VAT due, whichever is higher |
Late Payment | Delayed VAT payment | Interest charges at a rate of 0.2% of the taxes due per month of delay |
Inaccurate Filing | Filing incorrect VAT returns | Fines can range from 10% to 80% of the VAT undeclared or incorrectly declared |
Tax Fraud | Deliberate evasion or understatement | Severe penalties including increased fines or criminal charges |
Record Keeping Violations | Failing to maintain records for required period | Specific penalties are case dependent |
How long do I have an obligation of proof?
In France, businesses must retain their VAT records for a minimum of 6 years for audit purposes.
Thresholds for VAT Registration in France
For distance selling within the EU, the current VAT registration threshold for sales into France is €35,000. However, a new business with no VAT-taxable sales history in France can voluntarily opt to register for VAT immediately. It’s vital to confirm the latest thresholds with the French tax authorities or a tax advisor or fiscal representative in France due to potential changes or updates in legislation.
The French tax authority website or a professional legal or tax advisor can provide the most current and applicable advice regarding VAT compliance in France, and possibly help you with your VAT as well..
