VAT in France (TVA). What is the VAT rate in France? What is the France VAT rate? Which are the French VAT rates? French VAT rate? How do you recognise a French VAT number? How do I find information about the French reduced VAT rates in English? France VAT rate? Which electronic services have lower VAT in France? Vat rates in France?
French VAT number
The format for EU VAT Number: FRXX000000000
What is the standard VAT rate in France?
Standard VAT rate: 20%
What is the reduced VAT rate in France?
Reduced VAT rates:
Reduced rate 1 (10%): Tourism, Hotel, Restaurants, Household services/Homecare (sometimes even 5.5%), Firewood, Passenger Transport, Amusement Parks (Some have 20% due to lack of culture), Museum, Attractions, Pay-TV, some Residential Restoration, Construction of Social housing (for poor people), non-human Agricultural products, Agriculture and Forestry, Animal feed, Campgrounds and Ornamental plants.
Reduced rate 2 (5.5%): Books (violence, porn and excessive ad-content have 20%), e-books/Audiobooks, Artwork sold by the artist himself, Housing for the poor (social housing can also get 10% and 20%), Gas and Electricity (5,5% for grid fee max 36 kVA, consumption of electricity has 20% TVA), Renovation in private homes (which does not have 10%). Tickets for Sporting events, Cinema, Circus, Theater, Water Supply, Women’s Hygiene Products, Disability equipment and *most Food and Beverages.
Reduced rate 3 (2.1%): Newspapers and their e-newspapers and online content, some types of Medicines (primarily subsidised according to Article L. 5121-8 with prescription, a few pharmaceutical items are exempted entirely from the VAT system in France), TV- license, some types of Cattle intended for food production and some Performances (Theater and Circus performances with their own script, which also utilises regular services of a music group, but only 2.1% during the first 140 performances).
*Chocolate (except black and regular milk chocolate, chocolate candy, cocoa beans and cocoa butter), other Candy, Caviar, Margarine and Vegetable fats and Alcoholic content have 20%.
You will not be reimbursed for VAT expenses on: Hotels (for employees and managers, but ok for external persons), Taxi, Car rental, Gasoline (But 80% of the VAT on diesel), Flight tickets and Train tickets.
VAT on electronic services in France
VAT on most electronic services in France is 20%, i.e. the usual VAT rate as long as it is not an e-book (5.5%) or an e-newspaper (2.1%). What is the difference between a digital file, digital magazine, electronic book and a digital publication? Congratulations, call the French Tax Office and ask, but Learn French first…
Your local domestic Tax Agency cannot help you with this; you will be directed to the French counterpart.
Do you sell digital audiobooks to French customers? This is a grey zone, is it music? sounds? or a magazine or an e-book?
This is the problem with the new MOSS system where the foreign business will need to investigate and understand, the French VAT system (including all the other 28 countries’ VAT systems. But only 27 if and when the UK finally decides to leave the European Bureaucratic Union). Additionally, you have to design the invoices you send according to each recipient country’s specific invoice requirements (This requirement may, however, disappear during 2019), but of course, this does not work in practice, and small-scale entrepreneurs in the EU are becoming increasingly hostile to this neverending bureaucracy. The EU is becoming more and more like the Soviet Union each day, a bureaucratic nightmare of horrendous proportions.
First, the EU decided that France and others must raise the e-book VAT rate to the default (standard) level. But, in October 2018, the European Union did a complete turnaround and now actively allows reduced VAT on e-books. Changing the rules all the time is a perfect method for scaring away businesses from the EU. A Solid, and well-designed legal framework, which is consistent over time, is the key to growing the economy in Europe, but this fact is as far away from the minds of the Brussels bureaucrats as Andromeda galaxy is from the Milky Way.
Limit for distance selling to France
What is the threshold for sales to France? If you have trade with France and sales exceed € 35000, then you must register for VAT in France, and pay and report VAT in France.
Limit for registration on distance selling: € 35000
(before 2016, it was significantly higher at € 100,000)
How do you register for VAT in France?
If you have a company registered in France, you will be exempted from VAT registration below a € 32600 turnover.
Here is a tutorial for those who are going to be VAT registered in France
Exemption for VAT in France
There are some exceptions for VAT in France that are good to know. The French overseas departments French Guiana, Guadeloupe, Martinique and Réunion, are not included in the EU VAT area. Sales to these areas are considered to be exports outside the EU.
Monaco is not a member of the EU but is included in the EU VAT area under France. Sales to Monaco should, therefore, be recorded and reported as sales to France. This also applies to purchases from Monaco, which is considered to be purchased from France.
Corsica is part of France and is part of the EU VAT area but has its own VAT rates:
20% / 13% / 10% / 2.1% / 0.9%.
The standard rate is 20%, just like in mainland France.
0.90%: Certain theatrical performances and circuses, the sale of fresh meat to persons who are not required to pay taxes.
2.10%: Goods that have 5.5% in France have (often) 2.1% on Corsica. This also applies to some services.
10%: Some construction jobs on fixed constructions, agricultural machinery, sales at the point of sale, and delivery of low voltage electricity (<36 kVA).
How do you book purchases and sales to France?
Here you can see accounting examples for trades with France
Where do I check a French VAT number?
How can you check if an EU VAT number is correct?
Which areas constitute the EU VAT area?
How do you handle VAT when invoicing to France?
Invoice without VAT to a company (reverse charge).
Invoice with your own country’s VAT to private individuals in France, up to the threshold € 35000, then with French VAT (like if you sold it domestically inside France).
Electronic services (downloadable files from your website) are sold with French VAT if the buyer is a private individual. France has more exceptions for digital services than other EU countries. Usually, the VAT rate is 20%, but see exemptions earlier in the article.
How do you manage VAT when buying from France?
When you buy something from a French company, you need to self-assess VAT (calculate it yourself with your own country’s VAT rate and rules). This is only a fake calculation since there is no real VAT paid or received, it is just for accounting and VAT-reporting purposes. Many accounting programs handle this automatically now and add two rows of input and output VAT which cancel each other out. This will transfer the calculated VAT values to the corresponding boxes in your VAT return.