French VAT returns

Domestic and foreign businesses registered for VAT in France are typically required to submit monthly VAT returns using a CA3 form.

Domestic businesses with an annual VAT liability under €4,000 can submit quarterly returns, also using a CA3 form. Domestic businesses operating under the simplified VAT regime file their returns annually using the CA12 form if their VAT liability for the previous fiscal year was less than €15,000. If their VAT liability exceeded €15,000, they must file quarterly using the CA3 form.

Businesses from EU countries do not need a fiscal representative to file their VAT returns. Businesses from non-EU countries are usually required to file their VAT returns via a fiscal representative, unless a reciprocity agreement is in place that negates this requirement.

VAT returns must be filed online.

Businesses must include the following information when completing a VAT return in France:

• Total sales and purchases (exempt transactions must also be included)

• Intra-EU acquisitions and supplies

• Imports, exports, and reverse charge operations

• Amount of VAT collected

• Amount of VAT deductible

• Net VAT payable or refundable

Businesses registered for and charging VAT in France may offset the VAT output on sales with the VAT suffered on French supplies. This includes VAT charged on the import of goods. Examples of VAT deductions include:

• Accommodation and travel for clients (employee expenses non-deductible)

• Business gifts below €73 gross per year per recipient

• Advertising

• Import VAT

• VAT on the purchase of goods for resale

• VAT on capital expenditure

Any French monthly or quarterly VAT filing for a non-resident company is due between the 19th and 24th of the month following the period end.

Any French VAT due must be paid at the same time. There is a legal requirement in France to pay taxes by direct debit. Noncompliance with this requirement may lead to an increase of 0.2% of the VAT due being applied.

The penalty for late filing is 10% of the VAT due plus interest of 0.2% per month. This penalty may increase to 40% of the VAT due if the return is filed after 30 days from the filing reminder letter. An additional penalty of 80% of the VAT due may be imposed if authorities discover activity that wasn’t previously reported by the business. A late payment could incur a penalty of 5% of the VAT due plus interest of 0.2% per month.

If there is a surplus of VAT inputs over outputs (more VAT incurred than charged), then a French VAT credit arises. This is rolled over to the following month for offset against any output VAT due. It is possible to apply for a French VAT credit by submitting a form with supporting invoices.