Standard VAT rate: 19.6% (Apr 2000)
Reduced VAT rates: 7% books, pharmaceuticals, passenger transport, admission to cultural sporting and entertainment events, hotels, accommodation, restaurants
Reduced VAT rates: 5.5% medical, foodstuffs
Reduced VAT rates: 2.1% newspapers, pharmaceuticals
French VAT rate increase to 20% from January 2014
The French standard Value Added Tax rate will rise from 19.6% to 20% from 1 January 2014. There will also be an increase in the reduced VAT rate from 7% to 10%. The French super reduced VAT rate will be cut from 5.5% to 5.5%.
The VAT rise came as a surprise since the new Socialist government had promised at this summer’s French Presidential election to reverse Conservative plans for a VAT rise to 22.6%. This had helped the Socialists secure the election win.
Should you register for French VAT?
There are a number of trading situations which typically require a foreign business to register with the French tax authorities. These follow the broad EU VAT rules, and include:
- Importing goods into France if the customers is not a French company with a local VAT registration (reverse charge applies).
- Buying and selling goods in France if the customer is not a French company with a local VAT registration (reverse charge applies).
- Holding goods on consignment warehouse in France for longer than three months
- Holding live exhibitions, events or training in France with paid admission.
- Selling goods to French consumers via distance selling (internet, catalogues etc.)
- The self supply of goods.
- Certain leasing services.