VAT in France 2025: Rates, Registration, Filing, Payments & Penalties

Value Added Tax in France is a consumption tax applied at each stage of the supply chain, but the cost is ultimately borne by the end consumer. Businesses are responsible for collecting and remitting it to the French tax authorities.

Key Takeaways

1. VAT rate in France is 20% (standard), 10% (intermediate), 5.5% (reduced), 2.1% (super-reduced), 0% (exports), with certain exemptions.
2. Businesses exceeding the threshold of €85,000 (goods) or €37,500 (services) must register for VAT; tolerance limits apply for micro-businesses.
3. Registered businesses must issue VAT-compliant invoices, file returns electronically, report intra-EU trade, and apply reverse charge rules when required.
4. VAT credit or refund is available when input VAT on purchases exceeds output VAT on sales; credits can be carried forward or refunded.
5. VAT collected from customers and net of input VAT must be remitted between the 19th and 24th of the month following the reporting period.

What is VAT in France?

In France, Value Added Tax  is a consumption tax applied to most goods and services at each stage of production and distribution. It is collected by businesses on behalf of the French tax authorities but is ultimately paid by the final consumer.

VAT operates on a credit invoice system:

• Businesses charge VAT on sales (output VAT) and pay VAT on purchases (input VAT).
• They remit the difference (Output VAT - Input VAT) to the government. If input VAT exceeds output VAT, they may claim a refund or carry the credit forward.

For businesses, VAT compliance is a legal requirement that impacts pricing, invoicing, and cash flow. For consumers, VAT is included in displayed prices, for transparency. The rates and exemptions vary by product or service category and are subject to periodic changes under French and EU regulations.

How VAT Works in France?

Value Added Tax (VAT), TVA in French, is a consumption tax levied at multiple stages—from production to sale but ultimately paid by the end consumer. Businesses charge VAT on their sales (output tax) and deduct VAT paid on their eligible purchases (input tax). Only the net difference is remitted to the state. This system ensures VAT doesn't "cascade" and remains transparent throughout the supply chain.

Who Needs to Register for VAT in France?

VAT registration in France depends on your business’s residence status, activities, and annual turnover, along with whether you're a domestic or foreign entity.

Resident Businesses: Thresholds and Obligations

Businesses established in France are required to register for VAT when their annual taxable turnover exceeds the relevant threshold. 

Mandatory VAT Registration Threshold

• Sale of goods: €85,000
• Provision of services: €37,500

Micro-Business Tolerance Limit in France

The tolerance limit allows small businesses to slightly exceed the standard VAT exemption thresholds without immediate VAT registration, helping them avoid sudden compliance burdens.

• Standard thresholds: €85,000 (goods) and €37,500 (services)
• Tolerance limits: €93,500 (goods) and €41,250 (services)

Rule: If turnover stays below the tolerance limit in the current and previous year, VAT registration is not required. If turnover passes the tolerance limit mid-year, VAT applies from the first day of that month.

Intra-EU acquisitions

French VAT registration is required for businesses acquiring goods from another EU member state exceeding €10,000 annually.

E-commerce seller

Distance selling rules apply until the EU-wide €10,000 OSS threshold is exceeded, after which VAT registration or OSS registration is needed.

Non-Resident Businesses: No Threshold Rule

Foreign companies supplying taxable goods or services in France must register for VAT from the first transaction, regardless of turnover. This applies to both EU and non-EU entities, including those making distance sales or providing digital services to French consumers.

VAT Registration Thresholds in France (2025)

VAT Rate in France

France applies a multi-tiered VAT (Value Added Tax) system that balances government revenue with social and economic priorities. Different rates are used depending on the nature of goods or services, whether they are essential, cultural, luxury, or linked to public welfare.

2025 update: Electricity subscriptions moved from 5.5% to 20% (Aug 2025). Renewable heating and solar panel installations benefit from 5.5% (Mar 2025).

VAT Exemptions in France

Certain sectors and transactions are exempt from VAT, meaning VAT isn’t charged and input VAT can’t be recovered:

• Micro-enterprises under specific turnover thresholds are exempt
• Education, healthcare, and financial services
• Transactions between mainland France and overseas departments and territories are considered exports and exempt
• Betting revenues (excluding intermediaries) are VAT-exempt 

Obligations for VAT Registered Businesses

Once registered for VAT in France, a business must meet the following obligations to properly collect, report, and remit VAT

Issuing VAT-Compliant Invoices

Invoices are the foundation of VAT compliance. They serve as legal proof of transactions and must include specific details to be considered valid by French authorities. Businesses must ensure every invoice they issue complies with the following requirements:

• Clearly state the seller’s and buyer’s names, addresses, and VAT numbers (for B2B).
• Include the invoice date and a unique, sequential invoice number.
• Provide a description of the goods or services supplied, along with the net value.
• Show the applicable VAT rate, the VAT amount, and the total amount payable.
• Add mandatory wording where necessary, such as “reverse charge” for intra-EU supplies or “VAT not applicable” for small-business exemption cases.

Filing VAT Returns and Making Payments

VAT returns are the main way registered businesses report their VAT position to the French tax office. These returns summarize the VAT collected on sales and the VAT paid on purchases.

• VAT returns (Form CA3) must be filed online through the official tax portal.
• Filing is monthly by default, but businesses with smaller liabilities may be permitted quarterly filing under simplified regimes.
• Returns and VAT must be filed and paid between the 19th and 24th of the month following the reporting period
• VAT is due on the same date as the return, typically between the 19th and 24th of the following month
• All VAT payments must be made electronically, often through SEPA direct debit, immediately following submission.
• Since 2022, import VAT is no longer paid at customs but declared directly on the VAT return, improving business cash flow.

Maintaining Proper Records

Accurate record-keeping is essential for verifying compliance. Businesses must hold supporting documents that back up every VAT figure declared on their returns.

• Sales and purchase invoices, customs import/export documentation, and proof of transport for intra-EU deliveries must be preserved.
• All electronic invoicing and accounting systems must comply with France’s fiscal rules, such as sequential numbering and tamper-proof records.
• Invoices and accounting records should be retained for at least ten years in case of audits.

Reporting Intra-EU and Cross-Border Transactions

Businesses that trade across borders within the EU have additional reporting duties. 

• Intra-EU supplies of goods and services must be reported through Recapitulative Statements (known in France as the DEB or ESL).
• Intrastat declarations may also be required when trade volumes exceed set thresholds.
• Companies selling under EU schemes like OSS (One-Stop Shop) or IOSS (Import One-Stop Shop) must file these specialized returns separately.

Reverse-Charge Mechanisms

French businesses receiving services from suppliers in other EU countries or outside the EU must self-declare VAT through the reverse charge. Certain high-risk domestic sectors, such as construction subcontracting or trading in scrap metal, are also subject to the reverse charge.

Claiming VAT Credits and Refunds

When input VAT (the tax paid on purchases) exceeds output VAT (the tax collected on sales), businesses are entitled to a credit. 

• VAT credits can be carried forward to offset future VAT liabilities.
• Refunds may be requested if the credit exceeds a minimum threshold or on an annual basis.
• Non-EU businesses that are not VAT-registered in France can reclaim VAT through special EU or international refund schemes.

E-Invoicing and e-Reporting

France is modernizing its VAT system with E-Invoicing and e-Reporting requirements.  E-invoicing will gradually become mandatory, with VAT-registered businesses required to issue and receive structured electronic invoices. 

How to Calculate VAT in France?

VAT in France is calculated by applying the appropriate tax rate to the net (pre-tax) price of a product or service. Since VAT is included in the final price consumers pay, businesses need to know how to add or extract it correctly.

Adding VAT to a Net Price

This means applying the correct French VAT rate (20%, 10%, 5.5%, or 2.1%) to the pre-tax amount of goods or services to calculate the final price a consumer pays.

Formula:

Gross Price = Net Price × (1 + VAT Rate)

Example:

• A laptop costs €1,000 net.
• Standard VAT rate = 20%.
• Gross price = €1,000 × 1.20 = €1,200.

Extracting VAT from a Gross Price

Sometimes businesses need to back-calculate the VAT portion from a VAT-inclusive price.

Formula:

Net Price = Gross Price ÷ (1 + VAT Rate) 

Example:

• A restaurant bill is €55 (gross), at a reduced rate of 10%.
• Net price = €55 ÷ 1.10 = €50.
• VAT amount = €55 − €50 = €5.

Input vs Output VAT in Calculation

Businesses don’t just calculate VAT on sales, they also recover VAT they pay on purchases:

• Output VAT = VAT collected on sales.
• Input VAT = VAT paid to suppliers.
• VAT payable = Output VAT − Input VAT.

Example:

• Sales in a month = €10,000 net, VAT collected = €2,000 (20%).
• Purchases = €5,000 net,  VAT paid = €1,000 (20%).
• VAT payable = €2,000 − €1,000 = €1,000.

How to File and Pay VAT in France

Filing and paying VAT in France is a fully online process done through the official government portal. Here are the key steps:

1. Go to the official tax portal: impots.gouv.fr
2. Log in to your professional account using your SIRET/SIREN credentials.
3. Register for VAT if not already registered: see the official VAT Registration Guide (Service Public)
4. Fill out the VAT return (CA3) online via the VAT filing portal.
5. Enter all relevant transaction details: sales (output VAT), purchases (input VAT), intra-EU operations, and import VAT.
6. Submit the return electronically and keep confirmation for your records.
7. Pay the VAT online, typically via SEPA direct debit.

VAT Number Format & Structure in France

Every VAT-registered business in France receives a unique VAT identification number, used for invoicing, compliance, and cross-border trade within the EU.

Structure of a French VAT Number

A French VAT number is built from the country prefix FR, a two-character control key, and the company’s unique 9-digit SIREN number, making it essential for identification and tax compliance.

• Prefix: FR (France country code).
• Two-digit or two-character key (alphanumeric control code): It is generated using the company’s 9-digit SIREN number. Its role is to validate the number mathematically and protect against mistakes or fraudulent use. Without this key, invoices would not be considered valid for VAT deduction or compliance within the EU system.
• Nine-digit SIREN number: It is assigned by the French National Institute of Statistics and Economic Studies (INSEE) to every business in France. It serves as the company’s official ID in public registers, tax filings, and forms the base of the French VAT number.

Format: FR+2-digit key+9-digit SIREN 

Example:

• Company SIREN: 123 456 789
• Key: 45
• VAT number = FR45123456789

VAT Penalties in France

France enforces strict VAT compliance rules, with a system of financial penalties, interest, and in severe cases, criminal sanctions. 

The framework is progressive: small errors or delays may trigger fixed fines, while repeated delays or intentional misreporting attract much harsher penalties.

Conclusion

VAT compliance in France involves strict invoicing, reporting, and payment rules. Businesses must issue VAT-compliant invoices, declare VAT online (Form CA3), and submit returns and make VAT payments monthly or quarterly.  Special obligations apply for cross-border trade, such as reverse charge mechanisms, intra-EU recapitulative statements, and OSS/IOSS schemes for e-commerce. Businesses can recover input VAT paid on purchases, and refunds are available when credits exceed liabilities.

Late filing attracts a 10% surcharge, which rises to 40% if delays extend beyond 30 days, while fraudulent declarations can lead to penalties of up to 80% of VAT due, plus interest.