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Last updated at
December 11, 2025
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Book NowValue Added Tax (VAT) in France is administered by the Direction Générale des Finances Publiques (DGFiP) under the French General Tax Code. It is an indirect tax charged on the supply and import of goods and services at each stage of the value chain. Registered businesses can claim credit for VAT paid on purchases used for taxable operations. The standard VAT rate in France is 20 percent, and registration is required when annual taxable turnover exceeds €85,000 for goods or €37,500 for services (as of 2025).
This blog explains the VAT scope, registration, invoicing, filing, input recovery, and recent legal updates for compliance.
France introduced VAT in 1954, becoming the first country to apply this type of tax, which later became the foundation of the EU VAT system. VAT applies to most goods and services supplied or imported into France. The DGFiP enforces VAT rules through its digital platform and periodic guidance published on impots.gouv.fr.
The standard VAT rate is 20 percent, with reduced rates of 10 percent, 5.5 percent, and 2.1 percent for specific supplies, such as food, transport, books, medicines and newspapers. Zero-rated supplies include selected activities, such as exports and intra-EU supplies. Exempt services, including banking, healthcare, education and insurance, are also excluded.
In France, VAT operates as an input-output mechanism, allowing business owners to deduct VAT amounts from purchase activities in the context of taxes on taxable sales. Exporters are eligible for zero-rated treatment, allowing an input VAT refund claim for VAT paid on purchases that meets export conditions.
Businesses are obligated to obtain VAT registration from the DGFiP once they meet the threshold whereby their annual taxable turnover exceeds €85,000 in relation to goods or €37,500 in relation to services. Non-resident suppliers making taxable supplies in France are generally required to register upon the first sale unless the reverse charge applies. Obtaining VAT registration will ensure that the business is fully compliant with DGFiP rules regarding the issuing of valid tax invoices and allows the business to recover input VAT on expenses incurred in connection with taxable activities.
VAT registration process in France:
Access the DGFiP portal (impots.gouv.fr) and create an account.
Complete the VAT registration form with business identification and activity details.
Upload proof of business establishment, identity documents, and relevant certificates.
Receive a French VAT number (format FR + two characters + nine digits).
Begin filing VAT returns and issuing compliant invoices for taxable transactions.
France's VAT system has a few different rates, depending on what is being supplied. Different rates are aimed at reconciling tax revenue with consumer protection and economic activity. It is important for businesses to understand and apply the correct rate on each sale in order to remain compliant.
Current VAT rates in France:
20 percent – Standard rate on most goods and services.
10 percent – Reduced rate for restaurant services, passenger transport, and certain housing work.
5.5 percent – Lower rate for food, books, equipment for disabled persons, and renewable energy systems.
2.1 percent – Super-reduced rate for newspapers, specific medicines, and television licences.
0 percent – Zero-rated exports and intra-EU supplies that meet documentation requirements.
Taxable supplies include sales of goods and services within France and imports from outside the EU. VAT on imports is self-assessed through the French VAT return. Exports and qualifying intra-EU supplies are zero-rated when proper documentation is available.
As an example, a business in France selling goods to a business in Germany will apply the zero rate if both businesses are VAT accounted for and the goods are subsequently transported out of France. On the other hand, a non-EU business that is supplying digital services to consumers in France must charge French VAT and must register with the One Stop Shop (OSS) or Non-Union OSS scheme. In the case of services supplied by a non-resident to a business in France, the reverse charge will apply with the French business accounting for VAT on behalf of the supplier.
All VAT-registered businesses in France must provide a valid invoice for each taxable transaction. Invoices must include the supplier and customer information, VAT numbers, description, date, taxable amount, rate of VAT, and total VAT Once e-invoicing and e-reporting are mandated for all businesses, France will require, the process will be rolled out over a period from 2026 to 2027 for e-invoicing and e-reporting beginning with the largest companies, then medium-sized companies, finally all business with authorized certification platforms tied to the Portail Public de Facturation.
Each e-invoice must include:
Supplier and buyer identification details.
VAT numbers of both parties.
Invoice number and issue date.
Description, quantity, and taxable amount.
VAT rate and value charged.
Unique transmission code confirming DGFiP validation.
E-invoicing requirements:
Integration of accounting software with certified e-invoicing platforms.
Real-time or near-real-time reporting of sales and purchase data.
Secure electronic archiving for six years to support audits and verification.
In France, most businesses must file VAT returns every month using the DGFiP online portal. Small businesses that have an annual VAT of less than €4,000, may file quarterly. VAT remittances must be paid electronically at the time the returns are filed. Accurate accounting records help ensure proper reporting and timely compliance with obligations.
Doing either of these things late results in penalties and interest. The French tax authority will impose a penalty of 10 percent on late filings of VAT returns, and monthly interest on any unpaid VAT at a rate of 0.2 percent. Conducting regular internal checks of the business, and keeping track of compliance deadlines, will help the business avoid fines and having a bad compliance record.
A registered business can recover input VAT paid on goods and services purchased or consumed for taxable business activities. However, a business cannot recover input VAT paid on expenses incurred for exempt activities or when making exempt supplies, regardless of the type of purchase. To recover the input VAT, a valid invoice or customs document is necessary to substantiate the claim.
Exporters and zero rated suppliers of goods and services can either receive a refund or carry a balance over for future rebate when the input VAT is greater than the output VAT. A business that engages in both taxable and exempt supplies must apportion the amount of input VAT claimed in relation to the taxable activity. Claims for statutory VAT remedies are subject to review by the DGFiP, so it is immensely important for a business to maintain well-organized documentation and documentation records in order to prevent any delay or rejection of the request.
In 2025, France is in the process of developing its national e-invoicing and e-reporting framework in preparation for the EU revisions to VAT law, which will mandate major changes by 2028. France's DGFiP has produced the technical specifications for the changeover, noting the importance of interoperability, data accuracy, as well as potential fraud.
Key 2025 updates:
Broader e-reporting for all B2B and B2C transactions.
e-invoicing will be required in 2026.
Improved effectiveness of VAT fraud detection systems through real-time transaction monitoring.
Value-added tax (VAT) in France is governed by the General Tax Code and is managed by the DGFiP. The standard VAT rate is 20%, with reduced and zero rates applicable in certain sectors. Businesses are required to register once they go over the sales turnover threshold, issue VAT-compliant invoices, and ensure timely filing for returns. The input VAT can be reclaimed on taxable purchases, but if returns are filed late or not paid, penalty and interest will be charged.
As France moves to full e-invoicing in 2026, businesses can proactively adjust their systems to smoothly transition to the future VAT framework when it digitalizes.
Who must register for VAT in France?
Any business exceeding €85,000 in taxable sales of goods or €37,500 in taxable services must register with DGFiP. Non-resident suppliers must register from their first taxable transaction unless the reverse charge applies.
What is the standard VAT rate in France?
The standard VAT rate is 20 percent, and reduced rates of 10 percent, 5.5 percent, and 2.1 percent apply to specific goods and services.
Are exports subject to VAT in France?
Exports and qualifying intra-EU supplies are zero-rated, allowing businesses to recover input VAT paid on related purchases.
Is e-invoicing mandatory in France?
Yes. France will roll out mandatory e-invoicing and e-reporting between 2026 and 2027 for all VAT-registered businesses.
What are the penalties for late VAT payment in France?
Late payment incurs a 10 percent penalty and monthly interest of 0.2 percent on unpaid VAT until settlement.
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