France VAT Reclaim for EU businesses

General EU businesses (8th Directive)

French VAT is known as “Taxe sur la Valeur Ajoutee” (TVA).

Special rates apply in: Corsica and the overseas departments.

Goods and services supplied to or from the Principality of Monaco are regarded as having been supplied to or from France. However, specific rules may apply. For VAT purposes, the French overseas territories, the territorial communities (“collectivites territoriales”) of Mayotte, Saint-Pierre-et-Miquelon, Nouvelle Caledonie and Andorra are not considered part of the French territory. Thus, these territories are considered third party countries as regards France and other EU member states. French overseas departments also are considered third party countries for VAT

purposes, as regards transactions relating to goods supplied to/from France or other EU member states.

Refund Eligibility

A foreign taxable person is entitled to recover French VAT if the following conditions are satisfied:

  • The business is not registered or is only registered for Intrastat purposes (i.e. the business does not have to file VAT returns in France);
  • The business does not have residence, its seat or a fixed establishment in France;
  • The business has not carried out any taxable supplies in France, except for:
  • Certain tax-exempt cross-border transportation or ancillary services from/to non-EU countries;
  • Supplies for which VAT is due by the recipient in accordance with the rules in the EU VAT package;
  • Supplies of goods/services made by a non-established entity to a VAT-registered recipient in France;
  • Supplies made under a VAT suspension regime; and
  • Electronically provided supplies where the foreign taxable person opted for application of the special regime for non-established taxable persons supplying electronic services to non-taxable persons.

Non-refundable VAT

VAT cannot be recovered on:

  • Accommodation costs incurred on behalf of the management or staff of the company. (VAT is recoverable when such expenses are incurred for the benefit of persons not employed by the company, provided the expenses are incurred in the interest of the company or when it supplies the same services for consideration.);
  • The supply, import, leasing, repair and maintenance of most cars for passenger transport and other related costs, such as petrol. (However, 80% of VAT on diesel fuel can be recovered and VAT is recoverable when the cars are purchased by a car dealer for resale or by a person who hires out cars.);
  • Goods transferred without remuneration or for remuneration that is much lower than their normal price, unless the value of the goods is very low (except business gifts whose collective value does not exceed EUR 65, including VAT, per beneficiary per year); and
  • Domestic transportation of passengers and related expenses (except for public transport supplies and transportation from home to work, subject to conditions). If French VAT has been incorrectly charged, a foreign taxable person can, in principle, obtain a refund (unless a corrected invoice has been issued — a specific procedure applies for a supplier to issue a corrected invoice).

Minimum amounts

VAT refund claims can be filed on a quarterly or annual basis. If a quarterly refund claim is made, the amount of refundable VAT must be at least EUR 400; if an annual claim is made, the amount must be at least EUR 50.

A quarterly VAT claim is filed for a three-month period (except at the end of the year where a refund can be filed for a shorter period) for input VAT incurred during this period. The refundable VAT should be determined based on the tax point taking place during that period. A VAT refund claim also can be made on a calendar year basis.

Time limits

The VAT refund claim must be filed before 30 September of the calendar year following the year in which the VAT was assessable. Late claims are not accepted and the deadline will not be extended. According to comments issued by the French tax authorities (FTA) in 2010, a claimant cannot submit more than one supplementary refund claim for the remainder of a calendar year. However, according to recent information and from a practical point of view, the French tax authorities now seem to accept more than one complementary refund claim.

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