“If I’m a foreign entrepreneur, how do I pay the correct VAT rate in France for my services?”
This is a question that troubles many international business owners when they do business within global markets. Every country has a different Value Added Tax rate which needs to be adhered to by business owners who then need to pay that back to the government. But when you’re doing business in another country that has a different VAT system and rate to the country where your business is originally registered then things can get complicated.
In order to stay on the right side of the French law and tax man, you’ll need to register your foreign company for VAT payments (called TVA in France) so your business can charge the correct amount of VAT and not be penalized. Here's all the information you need to know about how to pay VAT in France.
How the VAT / TVA process in France works
First of all, to register for TVA payments in France you’ll need various pieces of documentation such as your company’s Certificate of Registration in your country of origin, a list of your shareholders and share capital. If you own a business within the European Union you’ll also need to provide your company’s current VAT number and give details about what type of business you do in France – is it regular or occasional? – and what type of clientele you have in France. All this will need to be translated into French.
Then you can apply to register with the French administration where you will receive a “Siret” number which is a unique business identification number. After you’ve received that you can then register your company on the French on-line VAT system called Télé-TVA. You are then able to do VAT returns.
VAT returns and payment
VAT returns in France are usually done on a monthly basis. You’ll need to provide sales receipts to prepare your statement that you’ll need to email to the tax office in ONE file only (you’re not allowed to submit several emails during the month).
Once the return has been received, you’ll then need to send the amount payable (by bank transfer) to the correct department.
A word of warning here: you’ll need to pay your VAT on or before the 19th of the month. Failure to do so will mean you’ll end up paying a fine which you’ll want to avoid!
Also be aware that these VAT procedures do not take into account reclaiming VAT on any purchases your company might make from France or any exported goods from France which would involve exchange of goods declarations.
So how long does the VAT registration take?
Timescales are always quite elastic when it comes to France (especially if you’re registering during the month of May when there are four public holidays or during the summer months when most of the tax office workers are away in the South of France!) There is also the problem of delays when sending your documents by international post. But if all goes smoothly then the process should take no more than 20 days.
How to register VAT the easy way
If all this sounds a tad complicated, there is an easier way to register your company for TVA in France. You can sign a “representation fiscal” or “tax representation mandate” which allows you to hand over the process to a French expert based in France that can register you for VAT. That saves you from having to navigate the complicated French administrative system during the setting up period and saves you money on international FEDEX fees or expensive recorded posted deliveries when handing over your documentation. The “representation fiscal” also allows the expert to file your VAT returns for you without the threat of penalties should you miss the deadline or get confused with the French system.
So whether you use an expert or go it alone, if you’re a global entrepreneur with French clients who wants to stay on the right side of French law, then you’ll need to register your company for VAT in France as soon as possible.
If you want more information about registering your company for VAT in France or want to speak to an expert, you can call us on 0033 (0) 1 53 57 49 10 or email us through our contact page.
