France introduced Value Added Tax, Taxe sur la Valeur Ajoutée or TVA, in 1954. It was then extended across the whole economy in 1968. It was the first country to launch VAT, followed by Germany
and other EU member states.
French VAT compliance - registrations, returns, Intrastat, DEB, ESLs etc follow the European Union VAT Directives. France implements these European ‘laws’ into its General Tax Code. The Direction de la Legislation Fiscale administers VAT in France, alongside the regional tax offices.
Foreign businesses, termed ‘non-resident’ traders, providing goods or services in France to local companies or consumers have to comply with French VAT rules, which may include the obligation register their business for French VAT. They will then have to follow the French VAT compliance rules, including invoicing and VAT rates, as well as pay over any French VAT due.
Should you register for French VAT?
There are a number of trading situations which typically require a foreign business to register with the French tax authorities. These follow the broad EU VAT rules, and include:
- Importing goods into France if the customer is not a French company with a local VAT registration (reverse charge applies).
- Buying and selling goods in France if the customer is not a French company with a local VAT registration (reverse charge applies).
- Holding goods on consignment warehouse in France for longer than three months
- Holding live exhibitions, events or training in France with paid admission.
- Selling goods to French consumers via distance selling (internet, catalogues etc.)
- The self supply of goods.
- Certain leasing services.
Few companies need to VAT register if they are providing services to local French companies, and instead can use the Reverse Charge process. This is based on the 2010 VAT Package changes.
Note that providers of electronic, broadcast or telecoms services to consumers in France only have to VAT register in one EU country under the MOSS scheme to file a single return covering all 27 member states.
If you do need to VAT register, read our French VAT registration briefing to understand the requirements, including any VAT registration thresholds that may apply.
There may be further exemptions from the requirement to VAT register in France that you should consider. Please read our French VAT Reverse Charge briefing.
Need a fiscal representative in France?
Non-EU businesses selling in France will need to appoint a fiscal representative alongside completing VAT registration and returns.
Fiscal representatives are responsible for the accurate VAT submissions of their non-EU clients.
Avalara offers a Fiscal Representative Service as part of its international VAT and GST Registration and Returns Service.
Need help with your French VAT compliance?
Researching French VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.
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