Declaring and Paying VAT in France

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Legal and Administrative Information Department (Prime Minister’s Office)

Businesses providing sales and services in France are subject to Value Added Tax (VAT France). This tax is collected by businesses and must be paid to the tax authorities. Depending on the VAT taxation system applicable to a business (VAT exemption scheme, simplified VAT regime, or standard VAT regime), the rules for declaration and payment vary.

VAT Exemption Scheme

To qualify for the VAT exemption scheme, a business must stay below a certain annual revenue threshold, which depends on its activity.

Eligibility Criteria:

A business falls under the VAT exemption scheme if it meets both of the following conditions:

  • Annual revenue does not exceed €37,500.
  • Annual VAT liability does not exceed €15,000.

Under this scheme, businesses are exempt from VAT, meaning they do not charge VAT to customers and are not required to declare or pay VAT.

Simplified VAT Regime in France

Businesses with annual revenue between €37,500 and €254,000 are subject to the simplified VAT regime.

VAT Declaration Process

The VAT declaration process depends on the amount of VAT declared in the previous year:

  • Less than €15,000 VAT declared: Businesses follow a simplified declaration process.
  • More than €15,000 VAT declared: A more detailed VAT declaration is required.

VAT Payment Deadlines

If the company closes its fiscal year on December 31, VAT must be paid in installments:

  1. First installment (July): 55% of the VAT due from the previous year.
  2. Second installment (December): 40% of the VAT due from the previous year.
  3. Final settlement (May of the following year): Any remaining VAT balance is settled.

If the business estimates that the installments cover the full VAT amount due, it can opt out of additional payments by submitting a signed declaration to the tax authorities.

Businesses can also adjust installment amounts if their estimated VAT liability is more than 10% higher or lower than the expected tax due.

Standard VAT Regime in France

Businesses with annual revenue exceeding €254,000 fall under the standard VAT regime.

VAT Declaration Requirements

Under this system, VAT declarations must be submitted monthly through the company’s professional account on the French tax portal (impots.gouv.fr). The declaration must include:

  • The total amount of VAT-taxable sales and services provided during the month.
  • A breakdown of taxable operations.

Quarterly VAT Filing Option

If the company’s annual VAT liability is below €4,000, it may opt for quarterly VAT declarations instead of monthly ones.

VAT Payment Process

Payments must be made monthly or quarterly through the company’s professional account on the impots.gouv.frplatform.

Adjustments and Modifications to VAT Payments

Businesses can request modifications to their VAT payments if they believe their estimated VAT liability is significantly higher or lower than the expected tax due. For example:

  • If the estimated VAT liability for the second installment is €15,000 but the required payment is only €10,000, businesses can adjust their payment to avoid an excessive final settlement.

Where to Get Assistance for VAT France?

Businesses needing guidance on VAT France can contact their local Service des Impôts des Entreprises (SIE) by providing their city name or postal code.

By following these guidelines, businesses can ensure VAT compliance in France and avoid penalties while optimizing their tax obligations.