You have just incorporated your company in France from London, New York, Dubai or Singapore. The Kbis company registration certificate has arrived, the corporate bank account is open, and your first French client asks for an invoice. Then comes the question that blocks many foreign founders: do you add French VAT to that invoice, and if so, with which VAT number? Get the answer wrong and the consequences pile up fast. Invoices without VAT when you should have charged it, VAT charged when you were covered by an exemption, a first VAT return filed late or never filed, and a reassessment letter landing at your registered office while you live thousands of kilometres away. This guide explains, for a foreign founder or foreign group managing a French company from abroad, how to obtain a French VAT number and know when your company must charge VAT, then how to file VAT returns in France and correct a late or wrong filing without travelling. Every French acronym is explained, every decisive rule is tied to its official text, and every procedural step is described so that it can be handled remotely.

If you have not yet incorporated your French vehicle, read first our complete company-formation guide for foreign founders, Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire, then come back here for the VAT journey that follows registration.

I. How does a foreign-owned company get a French VAT number and know when it must charge VAT?

A. When your French company becomes liable for VAT: first sales, the basic exemption thresholds and the intra-Community VAT number

French VAT, whose rules sit mainly in the CGI, the French Tax Code, applies very broadly. Article 256, I of the CGI provides: “Sont soumises à la taxe sur la valeur ajoutée les livraisons de biens et les prestations de services effectuées à titre onéreux par un assujetti agissant en tant que tel.” In plain English: supplies of goods and services made for consideration by a taxable person acting as such are subject to VAT. The full text is available here: Article 256 of the CGI on Légifrance. From the day your French company, most often a SAS, the flexible simplified joint-stock company favoured by foreign investors, or a SARL, the limited liability company with stricter statutory rules, starts selling goods or services in France, VAT is therefore the default regime, not the exception.

The main exception that matters for a young company is the franchise en base, the basic VAT exemption that releases small businesses from charging and paying VAT while, symmetrically, denying them any deduction of VAT on their purchases. Article 293 B, I of the CGI provides: “Pour leurs livraisons de biens et leurs prestations de services, les assujettis établis en France bénéficient d’une franchise qui les dispense du paiement de la taxe sur la valeur ajoutée lorsqu’ils n’ont pas réalisé en France un chiffre d’affaires, évalué dans les conditions prévues à l’article 293 D, excédant les plafonds suivants”. See Article 293 B of the CGI on Légifrance. For the previous calendar year, the ceilings are 85,000 euros for sales of goods and 37,500 euros for services other than sales of food for immediate consumption and accommodation services; for the current year, the upper reference figures are 93,500 euros and 41,250 euros. The official business portal adds that the exemption applies where turnover stays below these ceilings and the annual amount of VAT the company would otherwise owe stays below 15,000 euros, as explained on service-public.fr, Declare and pay VAT. Note for founders who read older commentary: the 2025 budget proposal to replace all these ceilings with a single 25,000 euro threshold was abandoned, and the same official page confirms that the thresholds remain applicable unchanged for 2026. Do not plan your pricing on the basis of press articles about the abandoned reform.

Crossing a ceiling has immediate practical effects. Once the threshold is exceeded, the company becomes liable for VAT, must charge it on its invoices from the date the rules set, and must register accordingly. That is why turnover must be monitored month by month from the first invoice, and why a founder who prices multi-year contracts should simulate what happens if a large order pushes the company over the ceiling mid-year. A company that keeps charging prices without VAT after losing the exemption will have to pay the VAT out of its own margin, because French clients, especially business clients, will rarely accept a retroactive price increase.

Registration itself follows company formation. When you incorporated through the INPI single window, the Guichet unique, the online portal run by the INPI, the French intellectual property and business formalities institute, through which all company registrations now pass, your company received a Siren number, the nine-digit national business identifier, and a Siret number, the fourteen-digit identifier of each establishment, and was entered on the National Business Register. The greffe, the registry office of the commercial court, then issues the Kbis, the official certificate proving the legal existence of a French company. For VAT purposes, Article 286 of the CGI still requires every taxable person, within fifteen days of starting operations, to file a declaration with the office designated by order: “Dans les quinze jours du commencement de ses opérations, souscrire au bureau désigné par un arrêté une déclaration conforme au modèle fourni par l’administration.” See Article 286 of the CGI on Légifrance. In practice today, this declaration passes through the single window and the tax administration, and the company is then identified by an individual number. Article 286 ter of the CGI organises this identification: every taxable person carrying out supplies of goods or services giving rise to a right of deduction is identified by an individual number. See Article 286 ter of the CGI on Légifrance. That individual number, built from the letters FR plus a two-digit key and the nine digits of the Siren, is the famous intra-Community VAT number that your clients and suppliers will check on the European VIES database before trading with you. If a client tells you that your VAT number does not validate on VIES, treat it as an emergency: fix the registration before issuing the next invoice, because an invalid number blocks your clients’ own deductions and destroys commercial trust.

Two administrative reflexes therefore belong in every foreign founder’s checklist. First, verify that the VAT number appears and validates as soon as the Kbis arrives, and keep a dated screenshot of the validation. Second, calendar the turnover thresholds from day one, with an alert at eighty percent of the ceiling, so that the switch to VAT liability never happens by surprise in the middle of a contract.

B. The three traps that catch foreign founders: French customers, foreign suppliers and the reverse charge when the supplier is not established in France

The first trap concerns invoicing discipline. Article 289, I of the CGI states the principle: “Tout assujetti est tenu de s’assurer qu’une facture est émise, par lui-même, ou en son nom et pour son compte, par son client ou par un tiers”. See Article 289 of the CGI on Légifrance. Every invoice between taxable persons must show the VAT number of both parties, the applicable rate, 20 percent as the standard rate in mainland France, 10 percent or 5.5 percent for the reduced-rate categories, and the amount of VAT. A founder under the basic exemption must instead show the statutory wording stating that VAT is not applicable under Article 293 B, so that the client understands why no VAT appears. Conversely, a newly VAT-liable company that keeps issuing exemption wording exposes itself to a reassessment for uncollected VAT plus penalties.

The second trap is the reverse charge, the autoliquidation, the mechanism by which the customer, and not the supplier, accounts for the VAT. Article 283 of the CGI starts from the principle that “La taxe sur la valeur ajoutée doit être acquittée par les personnes qui réalisent les opérations imposables”, then creates the exception that matters here: where a supply of goods or a service covered by Article 259 A is made by a taxable person not established in France, the tax is paid by the French VAT-identified purchaser, recipient or customer acting as a taxable person. See Article 283 of the CGI on Légifrance. The same article extends the mechanism to services supplied from outside France and to intra-Community acquisitions of goods, where the French purchaser accounts for the tax. For a foreign-owned French company, this matters in both directions. When your French company buys consultancy, software licences or marketing services from a provider in London, New York or Dubai, it is very often your company that must self-assess French VAT on its own return. When your French company sells services to business customers in other European Union Member States, it is generally the foreign customer that self-assesses, and your invoice must be issued without French VAT with the customer’s valid VAT number shown. Errors here are not cosmetic: omitting a required reverse charge entry understates both collected and deductible VAT and signals poor internal control to any auditor.

The third trap is acting as an intermediary. Many foreign groups use their French company as a local agent that contracts in its own name on behalf of the parent. Article 256, V of the CGI provides that a taxable person acting in his own name but on behalf of another, who intervenes in a supply of goods or services, is deemed to have personally acquired and supplied the goods or received and provided the services: “L’assujetti, agissant en son nom propre mais pour le compte d’autrui, qui s’entremet dans une livraison de bien ou une prestation de services, est réputé avoir personnellement acquis et livré le bien, ou reçu et fourni les services considérés”. See Article 256, V of the CGI on Légifrance. Commercial practice calls this the opaque intermediary, and the tax administration regularly recharacterises the role of vehicle traders, distributors and commission agents on this basis, extending the VAT base to the full transaction value. A recent illustration is the judgment of the Commercial Chamber of the Cour de cassation, the French supreme court for civil and commercial matters, of 15 May 2019, appeal no. 18-14.309, where a car trading company’s role was requalified as that of an intermediary in its own name deemed to have personally acquired and delivered the vehicles, with the VAT base assessed accordingly. See Cass. com., 15 May 2019, no. 18-14.309, on courdecassation.fr. If your distribution or agency contracts describe your French company as acting in its own name, have the VAT consequences reviewed before the first audit, not after the reassessment notice arrives.

Practical conclusion for this first part: validate the VAT number immediately, monitor the exemption ceilings continuously, invoice with the correct VAT status from day one, self-assess reverse charge VAT on foreign purchases, and clarify in writing whether the French company acts in its own name or as a transparent agent. Companies established outside the European Union that need a fiscal representative in France face extra steps that this guide only summarises: for that specific situation, see our companion guide, Foreign Company in France: How to Get a French VAT Number, Appoint a Fiscal Representative and Avoid Penalties. These five habits prevent the majority of VAT disputes that foreign-owned companies face in their first two years.

II. How do you file VAT returns in France and correct a late or wrong filing from abroad?

A. Filing your VAT returns on time: the monthly rhythm, the quarterly exception and strict deduction discipline

Once liable, your company must file returns and pay the tax on a monthly cycle. Article 287 of the CGI states the obligation: “Tout redevable de la taxe sur la valeur ajoutée identifié conformément aux dispositions combinées des articles 286 ter et 286 ter A est tenu de remettre au service des impôts dont il dépend et dans le délai fixé par arrêté une déclaration conforme au modèle prescrit par l’administration.” It continues: companies under the standard actual regime file this return monthly, showing total transactions and the detail of taxable transactions, and the tax due is paid each month. See Article 287 of the CGI on Légifrance. The return is the well-known CA3, filed electronically through the company’s online account on impots.gouv.fr, the online portal of the French tax administration. The only easing of the rhythm is narrow: “Lorsque la taxe exigible annuellement est inférieure à 4 000 €, ils sont admis à déposer leurs déclarations par trimestre civil.” Companies whose annual VAT payable is below 4,000 euros may file quarterly instead of monthly. A foreign director who assumed that French VAT works like an annual return discovers here the opposite: twelve or four deadlines a year, each of them mandatory, even in months with no sales, where a nil return must still be filed.

The return has two sides that must be mastered together. On the collected VAT side, every sale, every reverse charge due on foreign purchases, and every intra-Community acquisition must appear. On the deduction side, Article 271, I of the CGI sets the foundation: “La taxe sur la valeur ajoutée qui a grevé les éléments du prix d’une opération imposable est déductible de la taxe sur la valeur ajoutée applicable à cette opération.” The same article adds that the right to deduct arises when the deductible tax becomes chargeable on the supplier: “Le droit à déduction prend naissance lorsque la taxe déductible devient exigible chez le redevable.” See Article 271 of the CGI on Légifrance. Deduction is therefore never automatic: it requires a valid invoice showing the supplier’s VAT, a genuine taxable use of the purchase for the company’s taxed activity, and a deduction claimed in the correct period.

The strictness of the deduction deadlines was confirmed with unusual clarity by the Commercial Chamber of the Cour de cassation on 1 October 2025, appeal no. 24-14.456. The Court held: “le client d’un assujetti, lorsque cet assujetti a opté pour le paiement de la TVA d’après les débits, doit déclarer la TVA déductible figurant sur les factures dans le mois de leur réception et au plus tard le 31 décembre de la deuxième année suivante. A défaut de déclaration dans ces délais, le crédit de TVA ne peut donner lieu ni à imputation ni à remboursement.” In other words, where the supplier opted to pay VAT on debit notes rather than on cash receipt, the customer must declare the deductible VAT shown on the invoices in the month they are received and no later than 31 December of the second following year; failing that, the VAT credit can neither be offset nor refunded. See Cass. com., 1 October 2025, no. 24-14.456, on courdecassation.fr. The case concerned a liquidator sued for having let a VAT credit claim become time-barred, and the Court quashed the appeal judgment that had treated the deduction as a mere option exercisable at payment. For a foreign founder, the lesson is direct: never let supplier invoices pile up unprocessed in an inbox abroad, because deduction rights expire. When the company regularly accumulates VAT credits, for example an exporter or a company investing heavily before its first sales, a refund can be requested on the return, but only if the underlying deductions were declared within their time limits.

Organisation from abroad is entirely possible if it is deliberate. Open and test the company’s impots.gouv.fr professional account before the first deadline, appoint one person responsible for collecting every purchase invoice each month, reconcile the accounting software with the bank statements of the French account, and keep all invoices and VIES validations for the full retention period. A director living abroad who discovers at year-end that half the purchase invoices are missing has not a bookkeeping problem but a lost VAT asset, because expired deduction rights cannot be recreated.

B. Penalties, late interest and how to challenge a VAT reassessment without travelling to France

Missing a return or paying late triggers a mechanical penalty scale that every founder should memorise. Article 1728 of the CGI provides: “Le défaut de production dans les délais prescrits d’une déclaration ou d’un acte comportant l’indication d’éléments à retenir pour l’assiette ou la liquidation de l’impôt entraîne l’application, sur le montant des droits mis à la charge du contribuable ou résultant de la déclaration ou de l’acte déposé tardivement, d’une majoration de”. The rate is 10 percent where no formal demand was sent or where the return is filed within thirty days of receiving a demand, 40 percent where it is not filed within those thirty days, and 80 percent where an undisclosed business activity is discovered. See Article 1728 of the CGI on Légifrance. On top of these increases, Article 1727 of the CGI adds late interest on any tax debt not paid by the legal deadline: “Toute créance de nature fiscale, dont l’établissement ou le recouvrement incombe aux administrations fiscales, qui n’a pas été acquittée dans le délai légal donne lieu au versement d’un intérêt de retard.” See Article 1727 of the CGI on Légifrance. A single forgotten quarterly return can therefore cost the 10 percent increase plus months of interest, and a company whose existence the administration discovers through a client audit faces the 80 percent rate. Spontaneous correction before any audit or demand is always cheaper than waiting. Where a return deadline has already been missed, our step-by-step recovery guide walks through the correction: Your French VAT Return Was Missed or Filed Late: CA3, Penalties and How a Foreign Company Fixes It.

When the administration notifies a reassessment, the procedure follows a formal path that can be handled from abroad. First, the company receives a rectification proposal and has a short period, usually thirty days, to submit written observations; this adversarial stage is decisive, because arguments and evidence produced here shape the rest of the dispute. Second, if the administration maintains the reassessment, it issues a collection notice. At that stage, the company may file a formal claim, the réclamation, together with an application for suspension of payment, the sursis de paiement, which, where guarantees are offered, suspends enforced collection while the claim is examined. The protective effect of this combination was recalled by the Commercial Chamber of the Cour de cassation on 15 May 2019, appeal no. 18-14.309, which noted that the company had “régulièrement présenté une réclamation assortie d’une demande de sursis de paiement, laquelle suspend l’exigibilité de l’impôt”, a claim accompanied by a suspension application which suspends the enforceability of the tax. See Cass. com., 15 May 2019, no. 18-14.309, on courdecassation.fr. Third, if the claim is rejected, the company can bring the dispute before the administrative court of the place of its registered office, which for a Paris company means the Paris administrative court, entirely through written pleadings and a lawyer admitted in France. Physical presence at a hearing is not required.

Founders based in Paris and the Île-de-France region benefit from a practical advantage: the company tax office, the SIE, the local corporate tax unit competent for the registered office, the accountants, and the courts are concentrated locally, and a Paris-based lawyer can meet the administration, collect the file, and file the claim within the short deadlines while the director stays abroad. Whatever the location, three reflexes apply from the moment a reassessment letter arrives: diary the thirty-day observation deadline immediately, suspend nothing without advice but prepare the suspension application in parallel, and preserve every invoice, contract and bank record, because a VAT dispute is won on documents, not on explanations given months later.

One last warning closes this section. A VAT reassessment often arrives together with questions about corporate tax and about the director’s own position, and answers given hastily to the auditor on one tax can damage the defence on another. Coordinate the response across all open audits before sending anything, and never let an auditor note in the file an admission that the company’s records cannot support.

Conclusion

French VAT rewards foreign founders who treat it as a monthly discipline and punishes those who discover it once a year. Verify the intra-Community VAT number as soon as the Kbis is issued, monitor the basic exemption ceilings continuously, invoice each client with the correct VAT status, self-assess the reverse charge on purchases from suppliers outside France, file the CA3 return every month or every quarter without exception, declare deductible VAT within its strict time limits, and react to any reassessment within days through observations, a formal claim and, where needed, suspension of payment. Each of these steps can be performed from abroad with an online tax account, rigorous document collection, and counsel in France who holds the deadlines. The companies that pay the heaviest VAT penalties are rarely those that tried to avoid the tax; they are those that let invoices sleep, thresholds slip and deadlines pass. With the rules mapped in this guide and the official texts cited above, your French company can invoice, deduct and grow in full compliance while you run it from anywhere in the world.

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