La Représentation Fiscale
Since its creation in January 1963, the aim of La Représentation Fiscale has been to assist and represent foreign companies, essentially with regard to VAT. For 50 years now, our specialization has remained tax representation in the domain of VAT and of other taxes as well.
French VAT rules are based on regulations determined by EU. As an EU member state, the VAT directives providing guidance on VAT need to be implemented by France.
The French VAT law is ruled by the French tax code and administrated by La Direction Générale des Douanes et des Impôts Indirects.
In the 1990’s, the European Single Market Initiative allowed companies to buy and sell goods without a local company . It is called the non resident VAT trading. You will need to be registered as a non resident trader in order to record the transactions and your French customers will need the proof that you are VAT registered.
There are specific situations when the VAT registration is necessary. Please find below these scenarios :
- Passengers transport services in France ;
- Supply goods shipped from an EU Member State to private persons located in France when the annual turnover exceeds a threshold of 35 000€ ;
- Supply works related to an immovable property located in France belonging to a private individual or a company not VAT registered in France (reverse charge scheme not applicable) ;
- Provide short term rentals of means of transport in France ;
- Organize live events, conferences, etc in France ;
- Supply electronic services to private customers located in France ;
- Ship goods from France to other EU countries and supply them to a business client or have them shipped to a third country outside the EU (exports) ;
- Holding goods in a warehouse a stock for resale more than 3 months.
French VAT registration cases have been reduced in 2006 : the reverse charge mechanism applies when non – French companies has a French final customer VAT registered in France.
A French VAT number can be obtained within 4 weeks.
EU companies are no longer required to appoint a VAT fiscal representative in France. However, non EU companies are still required. Since 2013, certain non- EU companies may avoid to appoint a VAT representative, in case a mutual assistance agreement has been signed with France.
The rules regarding the recording and the processing of the French transactions are related to :
- The invoicing requirements ;
- The foreign currency reporting and translation ;
- Credits notes and corrections.
There are different VAT rates in France. The standard is 20% and the reduced VAT rates are :
- 10% home services (cleaning, childcare, home courses…), sales for immediate consumption (restaurants, beverages without alcohol…), works and repairs on residential buildings built from more than 2 years, sights, passengers transport, pharmaceuticals which are not reimbursed by the social security, fertilizers…
- 5,5 % food, beverages without alcohol, books, services to old people and to handicapped,
- 10 %, sales of pharmaceuticals when they are reimbursed by the social security and sales of newspapers when a CPPAP certificate is obtained
VAT returns and corresponding VAT payments must be received by French tax authorities at least :
– the 19th of the following month for the EU companies,
– the 24th of the following month for the companies located outside the EU.
Interest and penalties for late filing and payment of vat due.
Copy of invoices, customs documents and proof of transportation from France to the European Union must be kept during a period of 4 years in case of tax audit.
Intrastat returns are to be done in the following cases :
Purchases of goods to companies located in the EU for delivery in France : above the threshold of 460 000 € per year.
Sales of goods from France to companies located in the EU.
The Intrastat returns must be sent to French customs at least the 10th day of the following month.
EU sales lists are to be done in case of sales of services to companies located in the EU.
They must be sent to French customs at least the 10th day of the following month.
The input VAT is deducted from the output VAT. If there is a VAT credit a claim for VAT refund can be made each month together with the submission of the VAT return. The reimbursement is obtained within about 2 months.
The recovery of VAT for companies which are not VAT registered in France is possible for the companies established outside the EU via the procedure 13th Directive and EU companies via the 8thDirective procedure.
Type of expenses for which the VAT is refundable
– purchases of goods in France,
– liaison office expenses : rent, office supplies,
– congress, seminars, exhibitions,
– hotel : only if the rooms are for suppliers or customers,
– restaurant, beverages,
– gas oil, diesel : 80 % for private cars and 100 % for business vehicles (without seats in the back). VAT on petrol is recoverable only for transport companies.
– gift < 65 € including tax.