VAT Registration in France

Sometimes.

Where goods are sold B2B to a French VAT-registered customer, the reverse charge may apply, meaning the French customer accounts for the VAT instead.

For certain B2C sales within the EU, the Union OSS scheme may also allow VAT to be declared through one EU Member State instead of registering separately in France.

However, OSS does not normally remove the need for French VAT registration where you:

• Hold stock in France
• Import goods into France in your own name
• Make domestic supplies from French stock
• Transfer your own stock into France

The main French VAT rates are:

• 20% standard rate
• 10% reduced rate
• 5.5% reduced rate
• 2.1% special reduced rate

The correct rate depends on the goods or services supplied.

Foreign businesses are commonly required to file monthly VAT returns.

Quarterly filing may be possible where the annual VAT payable is below the relevant threshold. For foreign businesses filing through the Foreign Business Tax Department, monthly or quarterly returns are generally due by the 19th of the following month.

Where import VAT is reported through the VAT return, the filing deadline is generally the 24th of the month.

France has an important cash-flow advantage for importers.

Since 2022, businesses registered for French VAT generally account for import VAT directly through the French VAT return, rather than paying it upfront at customs.

The import VAT can normally be declared and deducted on the same VAT return, subject to the usual recovery rules. This can significantly reduce the cash-flow burden associated with importing goods into France.

It depends on where the business is established.

Businesses established in another EU Member State do not generally need to appoint a French fiscal representative. They may still appoint an agent to manage the registration and compliance process on their behalf.

Some non-EU businesses are also exempt from the fiscal representative requirement where France has an appropriate mutual-assistance agreement with their country.

Other non-EU businesses carrying out taxable activities in France are generally required to appoint a French fiscal representative, who assumes responsibility for VAT registration, filing and payment obligations.

Processing times vary depending on the structure of the business and whether additional information is requested.

As a practical guide, it is sensible to allow several weeks and to start the registration well before the first planned import or taxable sale.

Applications involving non-EU businesses, fiscal representatives or more complex supply chains may take longer.

Once registered, the business may need to:

• Submit French VAT returns
• Pay VAT due on time
• Report import VAT
• Submit nil returns where required
• Maintain appropriate VAT records
• Report certain intra-EU transactions
• Keep evidence supporting exports and zero-rated supplies
• Respond to enquiries from the French tax authorities

Late filing, late payment or incorrect VAT reporting can lead to penalties and interest.

For this reason, it is important to establish the correct filing frequency and accounting process from the start, particularly where imports and cross-border transactions are involved.

France can be attractive where goods are imported directly for the French market or where the business already has warehousing or fulfilment arrangements there.

The automatic accounting of import VAT through the VAT return is a major advantage because it avoids the need to fund import VAT upfront.

For businesses using France mainly as a gateway to other EU countries, however, the VAT structure should be reviewed carefully, as another EU jurisdiction may sometimes be operationally more suitable.

We can assist with:

• French VAT registration
• Assessment of whether registration is required
• Fiscal representation where necessary
• VAT return preparation and filing
• Import VAT reconciliation
• EU EORI and customs considerations
• OSS and cross-border VAT advice
• Correspondence with the French tax authorities
• VAT deregistration

We work with international businesses and can review the full supply chain before registration, including where goods enter the EU, who acts as importer of record, where stock is stored and where customers are located .