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VAT Registration in France - Updated Guide 2022

VAT Registration in France

Updated on Saturday 17th December 2022

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Our French lawyers can help foreign investors with the  VAT registration in France, as part of the business registration in this country.  In this article you can discover the registration process and formalities implicated, so you can have an idea about this topic.
 
 
 Quick Facts  
We offer VAT registration services Yes

Standard rate

20%

Lower rates

- 10% for certain foodstuff, pharmaceutical products, TV cable,

- 5.5% for water supplies, certain cultural events,

- 2.1% for public television, specific newspapers and periodicals

Who needs VAT registration Companies  with turnover over EUR 35,000
Time frame for registration Around 1 month
VAT for real estate transactions

5.5% for property purchase

Exemptions available

For:

- intra-community and international transport,

- local and regional authorities,

- exports of goods 

Period for filing

Monthly or quarterly

VAT returns support

Yes

VAT refund  For citizens and companies from non-EU countries under certain conditions
Local tax agent required

For non-EU companies

Who collects the VAT

- retailers,

- manufacturers,

- wholesalers

Documents for VAT registration

 - certificate of incorporation,

- extract from the French Trade Register,

- standard forms

VAT number format

FR country code followed by 11 digits

VAT de-registration situations

When companies close their operations

 

French VAT registration for a foreign company

 
From the beginning, we mentioned that there is no threshold for French VAT registration for a foreign company. However, there is a threshold for EU distance-selling companies, which is EUR 35,000 per year. There are some formalities to take care of for VAT registration in France as a foreign company, among them we mention:
 
  • The obligation to have a tax representative if the company comes from a non-EU country. Here, one of our French lawyers will be able to represent in this case with power of attorney.
  • Regarding the necessary documents to apply for French VAT registration for a foreign company, the Articles of Association, VAT certificate from the country of origin, and extract from the national trade register of the company.
  • Several forms with information about the company and activities on the territory of France will be filled out, these being provided by the Service des Impots des Entreprises.
  • We mention that VAT registration in France must be done in no more than a few weeks from the date of starting the activities.
 
A VAT ID in France can be obtained in a few weeks, depending on the documents presented and if the formalities have been respected. Even if you do not own a non-EU company, it is good to consider the support of a tax representative to be able to easily go through the requirements imposed by law for VAT registration in France. We remind you that you can benefit from specialized legal advice from our French lawyers.
 
Foreigners who want to buy a house in France have legal help from our French lawyers. Our team has experience in the field of real estate and can make the necessary checks to see if the desired property is involved in litigation or not. We mention that VAT for property purchases in France is 20%. Those interested can also apply for a mortgage if they want to buy a real estate property in France. Get in touch with our lawyers for complete details.
 

What is the VAT rate in France in 2022?

 
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 and the same rate is available and applicable in 2020. However, reduced rates of 10%, and 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, printed materials and other products and services.
 

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.
More about VAT registration in France can be solicited from our experts. Plus, our immigration lawyers in France can offer legal advice for those interested in relocation.
 

VAT registration in France for local companies

 
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. Here is an infographic that explains the VAT registration in France:
 
How to register for VAT in France1.png
 

How can I obtain the SIRET number in France?

 
Companies in France must obtain the identification number before starting the activities in this country by submitting the documents of the newly formed company. This is the SIRET code or number, also known as the “Système d’identification du répertoire des établissements”. The SIRET number is the same thing with the SIREN number, the unique identification number of businesses in France. This code is issued by INSEE, the National Institute of Statistics, as soon as the company is registered with the Chambre de Commerce for trade or with the Chambre de Metiers, the latter one being available for craftsmen and manual work.
 
The SIRET number can also be issued by URSSAF if the applicant wants to operate as a web designer, translator or is related with any other intellectual services. It is important to know that the SIRET number comprises the SIREN code plus other 5 digits. This important number shows that a company is registered for tax purposes in France. For more details about how to apply for SIRET code, feel free to ask one of our advisors who can tell you more about this procedure and formalities for 2022.
 
If you have decided on immigration to France, feel free to talk to our specialists. We have a team of immigration lawyers in France who can help you with the formalities.
 

Post VAT registration rules in France

 
Once the VAT registration is made for a company in France, that company can issue invoices comprising the VAT rate for the products meant for sale purposes on the market. Enterprises with activities in France have the obligation of keeping all the accounts and records for at least 10 years. Extra information about the VAT regulations in France can be solicited from one of our attorneys in France.
 

VAT reduced rates applicable in France

 
The 10% VAT rate applies to particular non-alcoholic beverages, inland waterways transport, international and intra-community road transport, amusement parks, some agricultural products, particular pharmaceutical products, domestic waste collection, cafes, bars and nightclubs, particular antiques and collectors items, restaurants, hotel accommodations, take away food and many more. As for the 5.5% VAT rate, this is applicable to a special category of non-alcoholic beverages and foodstuff, particular domestic care services, sanitary protection for women, medical equipment for disabled persons, books, e-books, sports events, school canteens, renovation services, particular cultural events.
 
It is important to know that particular pharmaceutical products are subject to a 2.1% VAT rate. The same rate is applicable to the purchase of periodicals, newspapers and TV license fees. If you need to know more about the VAT rates applicable in France, we kindly invite you to talk to one of our French lawyers. You can also ask for information about the available accounting services and tax compliance from our experts.
 

How can we help you with the VAT compliance in France?

 
Our advisors have a wide experience in business registration, plus related obligations, among which, the registration for VAT in France. We can also handle the VAT refund claims, for EU and non-EU companies established in France, and we can also help you prepare and file the VAT and INTRASTAT returns in France and/or other European countries. You can also solicit our legal help for registering with the EORI system in France and skip all the bureaucracies involved. A qualified tax advisor stands at your disposal and can give in-depth support and guidance in tax matters, including for VAT in France.
 

What are French VAT groups?

 
VAT groups involve intragroup supplies for the payment of this type of tax. According to a recent draft law, which will be implemented in January 2023, VAT groups can be considered as single taxable persons.
 
Thus, the VAT due can be consolidated in a single payment, allowing a cash flow benefit for groups of companies registered in France. In addition to the VAT account of the respective member, the head of the company group can submit a VAT declaration every month, with the help of which to consolidate the VAT position of all members, thus also calculating the total VAT resulting from the respective group of companies.
 
But until the legislation enters into force, it is good to know that each entity has its own obligations regarding VAT registration and compliance in France, such as the submission of the VAT declarations on a monthly basis and issuing invoices with the VAT ID registered in this country.
 
 
Here are some conditions that must be met to create a VAT group in France:
 
  • Each member of the group must file the corporate income tax returns in electronic format if the turnover exceeds EUR 400 million.
  • The head of the company group must have at least 50% control over each member.
  • The creation of a VAT group requires an application from the head of the group once each member has given his/her written consent to be part of that group of companies.
  • The accounting periods of all group members must be the same, and the VAT regime as well, with monthly statements about this tax.
 

Asking for a tax lawyer in France

 
In order to better understand the tax legislation in France, the recommendation is to discuss and collaborate with a tax lawyer in France. He/she has experience in this matter and can help local and regional entrepreneurs with VAT registration in France.
 
Also, an advisor can work with a power of attorney and represent clients for VAT registration and compliance. Do not hesitate to ask for our help and to benefit from all the necessary legal support for the company you own in France.
 

Making investments in France

 
France is known as one of the most powerful economies in the world and a top destination for investments of any kind. Large companies from abroad have branches and subsidiaries in France and enjoy the excellent business climate and conditions offered. The low tax rates, the skilled and multilingual workforce, and being the most industrialized country in the world make France a solid and preferred candidate for a wide range of foreign investments. The following numbers, statistics and facts highlight the business and investment direction of France:
 
  • around USD 869 billion represented the total FDI stock for 2019 in France;
  • according to 2020 Doing Business report issued by the World Bank, France ranked 32nd out of 190 economies in the world;
  • Spain, the Netherlands, Luxembourg, Japan, Finland, US and Germany are the main investors in France;
  • according to statistics, France is the 12th FDI recipient in the world;
  • around  USD 18 billion was the total value of the greenfield investments in France in 2019, the sector being subject to a rapid growth in the past few years.
 
If you want to set up a company and need details about the VAT registration in 2022, you can contact our French lawyers.