If your business is based outside of France but you engage in transactions in the French market, you may have to comply with French Value Added Tax (VAT) obligations.
Whether you're selling goods, providing services, or engaging in cross-border operations, understanding VAT rules in France is crucial to avoid penalties and ensure seamless operations.
This article will cover key aspects of VAT registration and obligations for non-French companies.
1. Understanding VAT in France
VAT, known as "Taxe sur la Valeur Ajoutée" (TVA) in French, is a consumption tax that applies to most goods and services sold.
Businesses, whether based inside or outside France, must collect and remit VAT if they engage in taxable activities in France.
The standard VAT rate in France is 20%, though reduced rates apply to specific goods and services, such as foodstuffs (5.5%), transportation (10%) or certain medicines (2,1%).
Please note that there are VAT exemptions for certain products and services (e.g. certain teaching activities, insurance and banking transactions ...).
2. When does a Non-French Company need to register for VAT?
A non-French company may need to register for French VAT in several circumstances.
Please note that in B2B transactions, the “reverse charge mechanism”
may apply. However, there are exceptions
to this principle. A thorough review of your VAT registration requirements
in France should be carried out.
Here are the key scenarios:
- Distance Sales of Goods: If your company sells goods online or through other channels directly to French consumers (B2C) and your total annual sales exceed the threshold of €10,000 across the EU, you must register for VAT in France. If your sales are below this threshold, VAT is charged in your home country (if within the EU).
- Supplying Services to French Consumers: If you provide services that are consumed in France (B2C transactions), you will need to register for VAT in France.
- Importations of goods into France: If you import goods into France from outside the EU, French VAT will be due, and you must register for VAT in France to carry out such transactions.
- Organizing Events or Exhibitions: Companies organizing conferences, trade shows, or similar events in France may need to register and comply with French VAT regulations.
- Storing Goods in French Warehouses: If your company stores goods in France (for example, via third-party logistics providers), you may need to register for VAT if you sell directly to French customers from this stock.
3. How to register for VAT in France?
The process of VAT registration for non-French companies involves several steps:
- Determine if French VAT registration is necessary
- Appoint a Fiscal Representative (if necessary): non-EU businesses are required to appoint a French fiscal representative to manage VAT-related obligations. This representative will act as a liaison with the French Tax Administration, handling VAT declarations and ensuring compliance.
- Submit the French VAT Registration application through the INPI portal with the information and documents requested
Our law firm is at your disposal to determine whether your company needs to register for VAT in France and, if so, to assist you in obtaining a VAT number in France.
You can contact us via email ([email protected]) or phone +33 6.85.65.93.56