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VAT registration in France

VAT in France

Updated on Monday 18th April 2016

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The French taxation system is based on direct taxes applied on the income of individuals and of corporations and other indirect taxes. Some of those indirect taxes are the withholding taxes applied to dividends, interests, real estate properties, social insurance and the value added tax.

What is the value added tax in France and what are its rates?

The value added tax or VAT (taxe sur la valeur ajoutée,TVA) is a tax levied on goods and services provided in France and it is also called a consumption tax. The value added tax applies to French companies but is collected from the final consumer that benefits from the good or service purchased from the company because it is included in the final price. The VAT is one of the most important taxes in France, as it is a big contribution to the state budget.

The standard VAT rate increased from 19.6% to 20% at the beginning of 2014 in France. However, reduced rates of 10% or 5.5% still apply to most food products and other consumption goods. There is also a reduced rate of 2.1% that applies to pharmaceuticals and printed materials.

VAT exemptions in France

The list of products exempt from VAT in France is quite extensive and among these products there are:

  • -          certain exported products,
  • -          some real estate operations,
  • -          certain imported products,
  • -          activities with educational purposes,
  • -          medical services,
  • -          certain operations fulfilled by non-profit organizations,
  • -          certain operations fulfilled by the authorities.

VAT registration in France

Companies making taxable products in France must register for VAT. However, French companies that supplied products worth less than 34,600 euros or services worth less than 86,900 euros are not required to register for VAT. Foreign companies providing services and goods in France are also required to register for VAT.

In order to start conducting business in France, a company is required to obtain a SIRET number. The company must register with the Register of Commerce and Companies in France and, upon registration, the VAT number will also be allocated. Companies registered in the European Union that undertake business activities in France are allowed to appoint a VAT representative.

If a company does not register or delays the VAT registration, it is subject to penalties in France.

If you want to set up a company and need details about VAT registration, you can contact our French lawyers.




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