VAT in France,

By: EconomyWatch   Date: 14 October 2010

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VAT in France is imposed on almost all goods and services. VAT or Value Added Tax is paid by the consumer and is charged at every stage of production. The companies also pay VAT when they purchase raw materials. But the companies compensates themselves through the prices they quote for their goods from the customers. Therefore, the VAT is borne by the consumers. In case the VAT amount paid by the manufacturing companies is more than what they have received as their earning; the VAT credit could be claimed by them. This is a rule which is followed by the European Countries.

VAT is a tax on exchange. It is imposed on every stage of production with an increase in the value of the produce from each exchange. The export transactions are not subject to VAT and if under certain special circumstances they are charged then the VAT would be refundable.

VAT was first introduced in France by a French economist in the year 1954. This came into effect from 10th April 1954. Maurice Laure who was the Joint Director of the Tax Authority in France introduced the VAT in the country but for large business firms. But, at present VAT is one of the most reliable sources of revenue for the government. VAT contributes 45% of the revenue.

Personal VAT amounts cannot be refunded but the business VAT amounts are refundable in France. It has been argued that VAT is a regressive tax. It was introduced because the high rate of sales tax might provide a boost to the smugglers.

VAT Recovery

Certain companies in France are not able to recover VAT. A French company cannot recover its VAT amount through its returns. However, Vat could be refunded in France on certain occasions. Refund could be claimed for conferences, telephone bills, exhibition and endorsement expenditure, training expenditure and others. Refund of VAT could end up in saving a lot of money. The rate of VAT in France is 19.6%.

Claiming VAT Refund in France

A company needs to be fill up a form which is specially made for this purpose. The form along with other legal documents must be submitted to the authorities.

In all the European countries there are strict rules regarding VAT, which if broken could lead to punishment, therefore the same applies to France also.

Mode of Payment

As soon as the return is submitted the payment is needed. The payment is required within a couple of days of the submission date of return.


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