French VAT on international transactions: Everything you need to know!

 

 

Do you  have any business transactions with suppliers or customers located in other European Union (EU)  country or outside the EU and and you don't understand how it all works with regards VAT in France?

Below you will find practical information on VAT in Europe and outside EU. 

 

For international transactions, the first distinction to be made is whether the transaction is a supply of goods or a service.

 

I- The supply of goods 


1- Outside Europe: Exports and imports

 

 

The supply of goods between a French company and a company located outside the European Union constitutes imports (for French, for purchase) or exports (for French, for sale).
Exports are exempt from VAT and imports are subject to French VAT.

The latter is to be paid at customs.

 

It is common for the importer to use a transit agent to handle customs clearance.

 

CASE N°1: A FRENCH ENTREPRENEUR/COMPANY  SELLS GOODS TO AN AMERICAN CUSTOMER


Invoice sent by a French supplier to an American customer (USA) for €10,000 excluding VAT.
 

 

 

CASE N°2: A FRENCH ENTREPRENEUR/COMPANY BUYS GOODS FROM A CHINESE SUPPLIER

 

Receipt of an invoice from the Chinese supplier for €100,000 (invoice without VAT, statements in accordance with Chinese legislation).

 

2- Inside Europe: Intra-Community acquisitions and sales

 

 

 

 

The supply of goods between a French company and a company located in another EU country is an intra-Community acquisition (for French) or an intra-Community sale (for French).

Intra-Community supplies are invoiced without VAT.

Purchasers self-assess VAT "auto-liquidation de TVA" (application of deductible and collected VAT) at the rate applicable in their country.

 

CASE N°3: A FRENCH COMPANY  SELLS 1,000 € OF GOODS TO AN ITALIAN CUSTOMER

 

 

CASE N°4: A FRENCH COMPANY  BUYS RAW MATERIALS FROM A POLISH SUPPLIER  FOR €1,000 BEFORE TAX

 

 II- International services provided

 

 

 

For the supply of international services, the rules are identical depending on whether the contracting parties are both members of the European Union or only one of them is a member of the European Union.

For B to B relationships (Business to Business, business-to-business relationships), the place of taxation of the supply of services is the place where the customer is established.
The service provider sends an invoice excluding VAT. The customer (if located in the European Union) autoliquids VAT at the rate applicable in his country.

 

CASE N°5: SALE OF A SERVICE

 

A French company invoices a management consulting service  to :

1-  Spanish company 
2-  Swiss company

 

 

 

 

Advice: in the case of a customer with whom the French company is working for the first time (example: Spanish customer), the French supplier is advised to check the validity of the intra-Community VAT number provided by the customer on the VIES system.

 

CASE N°6: PURCHASE OF A SERVICE

 

A French company buys a management consulting service from

1- an Italian company
2- an American company

 

 

 

If you need any assitance in VAT declarations and obligations, feel free to contact us, we will be happy to help you. www.escec-international.com

 

 

 

 

 

 

 

 

 

 

 

Share on Facebook
Share on Twitter
Please reload

Posts à l'affiche

Dépêche Juridique: Gérant, Les frais remboursés par la société

March 13, 2017

1/1
Please reload

Posts Récents
Please reload

Archives
Please reload

Rechercher par Tags