Updated with 2025 information.

VAT is a consumption-based tax supported by the final consumer of a good or service. It is collected and reversed to the state by the vendor or service provider, who deducts from the amount collected the VAT paid to suppliers. This article explains the principle in detail. If you run your business as self-employed person in France (micro entrepreneur or entreprise individuelle), you start off as not registered for VAT (franchise en base de TVA). This means that you do not need to charge your customers VAT, or declare and pay VAT to the tax office. As a result, you cannot claim any VAT back on the purchases that you make for your business.

Once you cross certain annual turnover thresholds, you must register to get a VAT number, and start collecting the tax from your customers. You can then deduct the VAT that you have paid to French suppliers for your business related purchases, and need to pay the rest to the tax office. Let’s take a detailed look at your options and steps to follow.

VAT regimes and thresholds

In France, there are several VAT regimes. Once you pass a certain threshold, you move up to the next one.

Franchise en base de TVA – not registered for VAT

When you start your business as a self-employed person in France (micro entrepreneur or entreprise individuelle), you begin by default as not registered for VAT (franchise en base de TVA). This means that you do not need to charge your customers VAT, or declare and pay VAT to the tax office. As a result, you cannot claim any VAT back on the purchases that you make for your business.

Your invoices should have the following the statement on them: “TVA non applicable, article 293 B du Code Général des Impôts (CGI)”.

If you provide services B2B (your clients are VAT-registered companies) within EU, you need to apply for your EU VAT number even if you are under the limit. You also need to file a DES (déclaration des services Européenne) either on paper or on French customs website.

If you sell goods or provide electronic services B2C (physical persons) within EU, you need to follow the rules described in this article.

As your turnover reaches a certain limit, you can no longer benefit from this regime and must register with the tax office as a VAT-payer. There are two types of limits : minor (minoré) and major (majoré).

You need to register for VAT from the 1st of January of the following year, if you have crossed the minor, but not the major limit in the current year. In the first year of business, you need to adjust the minor threshold on pro-rata basis. You need to register immediately if you are about to cross the major VAT threshold. Your invoices must include VAT starting from the day you cross the threshold.

The thresholds in 2025 are the following:

Activity	Minor limit	Major limit
Selling goods, providing accommodation, or restaurant	85 000€	93 500€
Other services	37 500€	41 250€
Lawyers, authors and performing artists – specific activity	50 000€	55 000€
Lawyers, authors and performing artists – non specific activity	35 000€	38 500€

If you are both selling goods and providing services, then your total turnover should be under the “selling goods” limit, and the turnover for services under the corresponding threshold at the same time.

When you apply to be VAT-registered, you need to choose one of the two following regimes:

Régime simplifié d’imposition – simplified taxation regime

If your turnover is above the limits mentioned before but below the ones in the next table, you can opt for the simplified regime.

Activity
Selling goods, providing accommodation, or restaurant	840 000€
Other services	254 000€
Lawyers, authors and performing artists	254 000€

At the same time, the total VAT to be paid cannot be more that 15 000€ per year.

This regime means that you file your VAT declaration once a year, and pay two deposits during the year.

Régime Réel Normal – Normal Regime

Is for everybody else. The declarations are filed monthly, and you pay the VAT due to the state monthly, too. The cut off date depends on your location and business type. If the total VAT to be paid is less that 4 000€ per year, you can opt for filing your declaration every 3 months instead.

Opting in

Despite the wide-spread notion that you cannot register for VAT if you are under the threshold, in reality you can opt in for simplified or normal regime. This is normally worth it if you make a lot of purchases in France, but sell goods outside the country B2B or export them – this way you can claim back the VAT you pay, but do not collect any.

You can also opt in for a normal regime even if you fall under simplified category. This depends on how you prefer to manage your cash flows – and how avert you are to paperwork.

How to register

Your tax office is required by law to register you within 48 hours from your request made in person or over the phone. reality this may be more complicated, and take longer.

What needs to be on the invoice

Your invoice must contain a number of details, including:

• your business name
• your address
• your SIRET number
• your VAT number
• your client’s details
• the price before tax
• the VAT rate and amount
• the total amount due

VAT rates

In Metropolitan France, for most goods and services the VAT rate is 20% of the price before tax. So to calculate your tax you need to multiply your before tax price by 0.2. To get the final price you therefore need to multiply your before tax amount by 1.2.

To reverse the calculation, to get a before tax amount, you need to divide your final price by 1.2. To calculate the tax you then multiply the resulting number by 0.2. Pay attention, as multiplying your final price by 0.2 to get the VAT amount is wrong!

Certain goods and services benefit from lower rates (2.1%, 5.5% and 10%) – if you are in construction, hospitality, F&B, agriculture, pharmacy, theatre, publishing business, find out the applicable rates.

The VAT rates are also different in Corsica and in Overseas Departments and Territories.

Claiming the VAT paid

When calculating the VAT to be paid to the tax authorities, you take the total amount of the VAT you have collected from your customers, and subtract from that the total of deductible VAT that you have paid over the same period. Note that VAT on goods is exigible and deductible as per invoice date, and the VAT on services, unless “debit” option is applied, is due and deductible as per the payment date. Slightly different rules apply when dealing within EU.

You can claim most of the VAT paid on business-related purchases except:

• expenses related to non-commercial cars (buying a car, maintenance, etc; fuel is partially deductible )
• parking
• public transport, plane, train and boat tickets, taxis etc
• parking (except for long-term rental)
• personal meals
• hotels
• gifts (except those less than 69€ including tax per beneficiary per year)

To be able to claim the VAT back, you need to have a purchase invoice with all the details as above – especially the amounts before tax and of the tax itself. Those must be kept for 10 years.

Keeping records and using an accountant

You need to keep rigorous records of all the revenues and expenses. While you can use a spreadsheet, accounting software makes things easier – you will have to declare your revenues that are subject to VAT, but also those that are not. For purchases, apart from declaring the deductible VAT, you will also have to declare your goods and services purchases without VAT from EU and from the rest of the world.

Overall, the rules regarding the VAT are quite complex and are not limited to those described above. It is therefore a good idea to consult with a professional to give your more detailed information, or hire an accountant to take care of your declarations.

Contact me if you haveany questions!

Important: Every situation is different and may need professional advice. The information on the Compte Plus website is general and should not replace legal, accounting, or tax counsel. If in doubt, contact a specialist for tailored advice.