A French company that sells services to a customer in the United States must answer three separate questions before sending its first invoice: is the customer acting as a business or as a private consumer, where is the customer’s establishment that receives the service, and does the service fall within a territorial exception? The customer’s American address is an important fact, but it is not, by itself, a complete VAT analysis. The company must also preserve evidence that supports the classification selected in its records and use wording that identifies the French legal basis for the absence or application of value added tax.
For a business-to-business service supplied by a taxable person established in France to a taxable person established outside the European Union, the general French rule normally places the service outside French VAT. The French tax authority states that such a service “n’est pas imposable à la TVA française”, while Article 259 of the French General Tax Code (the Code général des impôts, or CGI) supplies the territorial rule. The result changes when the US customer has a French fixed establishment receiving the service, when the customer is a consumer, or when the service concerns French real estate, an event, or another statutory exception.
This guide gives a practical legal method for a foreign founder, finance team or French subsidiary. It addresses the qualification of the client, the evidence file, invoice wording, declarations, currency, corrections and the transition scheduled for 1 September 2026. It does not decide US federal or state sales-tax, income-tax or permanent-establishment questions, which require a separate US review.
It should be read alongside the firm’s French business law and company formation hub, which covers the wider legal framework for a foreign-owned business operating in France.
I. How does French VAT apply when a French company serves a US client?
A. Is the US customer a business, and where is it established?
The starting point is not the nationality of the founder, the currency of payment or the location of the bank account. The starting point is the status of the customer and the establishment that receives the service. A French company should therefore identify the customer in the contract, onboarding file and invoice with enough precision to demonstrate why the transaction was treated as business-to-business, commonly abbreviated as B2B. If the customer is not acting for an economic activity, the analysis is business-to-consumer, or B2C, and the B2B rule cannot simply be copied.
Article 259 of the CGI contains the general place-of-supply rule for services. For a service supplied to a taxable person acting as such, the place is generally linked to the recipient’s business establishment or the fixed establishment that receives the service. A US corporation, limited liability company or partnership can therefore be the relevant taxable person even though the United States has no French VAT identification number. The French company should document the customer’s legal existence, business activity and US establishment rather than treating the absence of a European VAT number as a reason to charge French VAT. The current text of Article 259 of the CGI is the principal statutory reference for this analysis.
The practical invoice consequence for a qualifying service is usually an invoice without French VAT, with the legal wording “TVA non applicable – art. 259-1 du CGI”. The words are deliberately retained in French because they identify the French rule used by the issuer. “TVA” means taxe sur la valeur ajoutée, the French term for value added tax. The French tax authority’s official guidance on services between taxable persons confirms the distinction between a service to a customer in the European Union and a service to a customer outside the European Union: for a non-European customer, the invoice uses the Article 259-1 wording rather than presenting the transaction as a normal French-taxable sale.
This is not automatically the same as writing “reverse charge”. Reverse charge is a useful English description for some situations in which the recipient is liable for tax, but a US customer is not an EU VAT customer simply because the customer is a business. The invoice should not use “Autoliquidation” as a reflex for every American client. The French wording should match the actual legal basis, the customer’s status and the country in which the service is located for VAT purposes. If a customer asks for an English invoice, the company can add an English explanation below the French legal wording: “No French VAT: place of supply outside France under Article 259-1 of the French General Tax Code.”
What evidence proves that the US customer is a business? There is no single document that answers every case. A defensible file normally combines several consistent items:
- the customer’s certificate of incorporation, state registration extract or comparable public registry record;
- the customer’s employer identification number, commonly called an EIN, or another US tax identifier, while remembering that an EIN is evidence of identity and not a French VAT number;
- the signed contract identifying the customer as a company, its business purpose and the entity receiving the deliverables;
- the customer’s business address, website, purchase order, professional email domain and payment instructions;
- where relevant, a representation that the customer is acquiring the service for its business and that no French fixed establishment receives it; and
- emails, project records and delivery documents showing where the customer’s business team used the service.
The file should also identify whether the American group has a French subsidiary, branch or office. A US parent may be the contractual customer while a French affiliate actually receives the work. Conversely, a French subsidiary may sign the contract while the US parent’s personnel consume the service. The company should not use the invoice address as a substitute for this factual analysis. The recipient’s establishment that receives the service is a legal and operational question, not merely a formatting field.
That point matters particularly for a group with several entities. If a French subsidiary provides advice, software support, research or management work for a US parent, the contract should specify the recipient, the deliverables and the place from which the recipient manages the project. If a French affiliate receives the benefit, gives the instructions and uses the deliverables in France, the company should test whether the French establishment is the relevant recipient. A group chart, intercompany agreement, purchase order and allocation of deliverables can be more valuable in an audit than a generic “international services” label.
French corporate documents can help establish the identity of the supplier but do not, by themselves, prove the American customer’s VAT status. A Kbis is the official extract showing a French company’s registration in the commercial register; the greffe is the registry office attached to the competent commercial court. The Kbis of the French supplier confirms its registered name and address. It does not prove that the US recipient is a business, that the recipient has no French fixed establishment, or that the service is not connected with French real estate. Those facts belong in the customer file.
Courts also focus on the real economic operation and the legal role of the parties. In CAA Versailles, 1st chamber, 10 January 2023, no. 21VE01670, the court examined the person liable for the VAT connected with the service and referred to the proposition that “le redevable de la taxe sur la valeur ajoutée afférente est le prestataire”. The decision is not a substitute for Article 259, and its facts must be read in full, but it illustrates why the file should connect the service, the supplier and the recipient instead of relying on a country label.
The same discipline applies when a US customer presents a form W-9, a state tax certificate or a federal EIN letter. Those documents can support the identity and business status of the customer. They do not decide whether the customer has a French fixed establishment. Ask whether the customer has a French office, employees, dependent agents, project team or operational site involved in receiving the specific service. The answer should be recorded contemporaneously, especially for recurring invoices or high-value engagements.
B. When do French territorial exceptions bring VAT back?
The general B2B rule is broad but not unlimited. Article 259 A of the CGI contains special rules for categories of services whose place is determined by their connection with a physical location or activity. The statutory list includes services connected with immovable property, admission to cultural, artistic, sporting, scientific, educational or entertainment events, passenger transport, restaurant and catering services, and certain other operations. The current Article 259 A of the CGI must be checked against the actual service, not merely its commercial name.
A French company may have a US corporate customer and still need to charge French VAT if it supplies a service directly connected with a building or land in France. Architectural, surveying, construction, property-management and certain legal or technical services can require a property analysis. The address of the customer’s headquarters in New York, Delaware or California does not displace the location of the French property. The contract should identify the property, the work performed there and the legal basis for the invoice.
Event services raise a different question. A US company buying access to a conference, trade show, training session or entertainment event held in Paris is not treated in the same way as a US company buying remote strategic advice. The place-of-supply rule can follow the physical event. The same caution applies to catering, on-site work and services whose substance is the use of a place or attendance at an activity. A remote contract that uses the words “consulting” or “support” does not prevent the authorities from examining what the company actually supplied.
Composite projects require a service-by-service analysis. A contract may combine remote advice, an in-person workshop in France, access to a French venue, installation, maintenance and a deliverable that concerns a French asset. The invoice should not conceal all of those elements under a single vague line if different territorial rules apply. In CAA Paris, 2nd chamber, 9 May 2018, no. 17PA02074, the court recalled that “chaque prestation doit normalement être considérée comme distincte et indépendante”. That principle is important when separating a non-taxable remote service from an operation linked to France.
The customer’s fixed establishment is another exception to the simple American-address analysis. A fixed establishment is not created by every occasional visit or every customer who owns a French company. The question is whether the recipient has a sufficient degree of permanence and an appropriate structure in France to receive and use the service. Indicators can include personnel, premises, technical resources, contractual instructions and the way the project is accounted for. If the service is really supplied to that French establishment, the company should reassess the place of supply and the invoice treatment before the billing cycle closes.
B2C transactions require separate treatment. A private person who lives in the United States is not automatically the same recipient as a US corporation. The general B2C rules and specific provisions for electronic services, telecommunications, broadcasting, events, transport, property and other categories can point to a different place. A French company that sells legal advice, coaching, design, software access or a mixed package to an individual should record why the customer is or is not acting as a taxable person. The CGI provisions on services supplied to non-taxable persons should be reviewed with the service category rather than assumed away.
A decision of the administrative court of appeal of Marseille is a useful reminder that factual classification drives the result. In CAA Marseille, 3rd chamber, 9 April 2026, no. 24MA02228, the court addressed the territoriality of VAT for services supplied by a French provider to recipients outside the European Union. The decision should not be turned into a general exemption for every French service: the identity of the recipients, their status and the nature of the service remain decisive. Its value for a founder is methodological: preserve the facts that show who received the service and why the applicable territorial rule leads outside French VAT.
The place of supply can also be affected by a service that is physically performed in France, even where the commercial customer is American. A US business that sends an employee to Paris for an on-site service may still be buying from a French supplier under the general B2B rule, but the company must test whether the specific service falls within an exception. The work order should distinguish remote deliverables from physical installation, property work, admission, catering or training. If the team cannot describe the distinction in a sentence, the invoice description is probably too vague.
Another common error is to confuse territorial non-taxation with the French small-business franchise. Article 293 B of the CGI can relieve a qualifying business from charging VAT because its taxable turnover remains within the statutory thresholds. That is different from a service that is outside French VAT because its place of supply is the United States. If the company supplies a French-taxable operation and qualifies for the franchise, the relevant wording is linked to Article 293 B. If the service is outside French VAT under Article 259, Article 293 B is not the reason why no French VAT appears. The official Article 293 B text and the related Article 293 E wording requirement should not be mixed with the territorial rule.
Timing is unusually important for an invoice issued in August 2026. The French VAT provisions are being reorganised by Ordinance no. 2025-1247 of 17 December 2025, with a transition scheduled for 1 September 2026. A company should record the date of the service, the date of the invoice and the version of the official text consulted. For an invoice issued on or after the transition date, the finance team should check the then-current Code of taxes on goods and services and updated tax-authority guidance rather than copying an old template without review. The legal analysis may remain substantively similar while the article number or wording changes.
II. How should the company issue, support and report the invoice?
A. What wording and evidence should the invoice contain?
Once the territorial analysis is complete, the invoice must make the conclusion visible. Article 289 of the CGI imposes the general invoicing obligation and requires a reliable, readable record of the transaction. The current Article 289 of the CGI should be read with the mandatory invoice particulars in Article 242 nonies A of Annex II to the CGI. These provisions are more useful than a generic online invoice template because they show what the French tax administration expects the document to identify.
For a French company supplying a qualifying B2B service to the US customer’s US establishment, the core French line should be:
TVA non applicable – art. 259-1 du CGI
The invoice can then add a plain English translation without replacing the French legal line: “French VAT not applicable because the place of supply is outside France under Article 259-1 of the French General Tax Code.” The invoice should state the supplier’s full legal name, registered address, French company registration details, French VAT identification number when the company has one, the customer’s legal name and address, a unique sequential invoice number, the invoice date, the service date or period, an intelligible description, the net amount, currency, payment terms and bank details. A US customer may not have a French VAT number; the company can show the EIN or state registration detail as an identification field, but should not invent a European VAT number.
Article 242 nonies A also contains wording requirements for exemptions and reverse-charge situations. The relevant phrase depends on the legal basis. “Autoliquidation” is appropriate only where the applicable rule places the tax liability on the recipient. For the standard French-to-US B2B territorial result, the safer wording is the specific Article 259-1 reference. A French company should not copy “reverse charge” from an EU invoice template merely because the customer is foreign. The United States has no EU VAT mechanism that makes the American customer a recipient liable under the ordinary intra-EU service rule.
Three invoice examples illustrate the distinction:
- Remote B2B advice to a US corporation with no French receiving establishment: show the net amount and “TVA non applicable – art. 259-1 du CGI”, supported by the customer-status file.
- French-taxable service supplied to a customer that qualifies for the French franchise: use the Article 293 B wording only if the company satisfies the franchise conditions and the transaction is otherwise within French VAT territory.
- Service connected with French real estate or a French event: test the applicable Article 259 A rule and charge or report French VAT when the statute makes the operation taxable in France; do not use Article 259-1 simply because the payer is American.
The service description should be concrete. “Consulting services” is weaker than “legal review of the US distribution agreement delivered remotely to [US entity] during July 2026” or “software development sprint delivered to [US entity] under statement of work dated [date]”. The description should not misstate the location or suggest that the supplier performed property, event or on-site work when it did not. If a project contains several components, separate them by line or attach a schedule that maps each component to its VAT treatment.
Evidence should be kept with the invoice, not reconstructed only after a tax audit begins. A practical electronic file can contain the signed master services agreement, statement of work, customer incorporation record, EIN or equivalent, address verification, written customer representation, emails showing the recipient team, delivery records, invoices, credit notes and payment confirmation. The company should note any change in the customer’s group structure, office, contracting entity or place of use. A recurring invoice can rely on an unchanged annual file only while the relevant facts remain unchanged; renewal should trigger a short confirmation.
The evidence file should be proportionate, but it must be coherent. A US customer’s contract may name a Delaware entity, while the purchase order, delivery address and instructions come from a French subsidiary. That inconsistency is not automatically fatal, but it needs an explanation and possibly a corrected contract. Likewise, a US address on the invoice is weak evidence if the project documents show that a French office commissioned, received and used the service. The strongest file is the one in which the legal customer, operational recipient and invoice description tell the same story.
Invoice language and currency deserve their own check. Article 289 permits the commercial document to use a foreign currency, but the amount of any French tax payable must be determinable in euros. If the service is outside French VAT, the absence of tax does not remove the need to show the net amount, currency and payment terms clearly. Article 266 contains the currency-conversion rule for the taxable base where a French VAT amount must be calculated. The current Article 266 of the CGI should be consulted for the applicable exchange-rate method.
An English invoice is commercially sensible for a US customer. The company should nevertheless be able to provide a French version or French explanations if the tax administration requests them. The legal wording “TVA non applicable – art. 259-1 du CGI” should remain visible, even if the rest of the invoice is bilingual. Payment terms, late-payment interest, the fixed recovery indemnity where applicable and the governing-law clause should be reviewed separately from VAT; a correct VAT line does not cure a defective commercial contract.
Credit notes require the same care as original invoices. If the company wrongly charged French VAT on a service that was outside French VAT, it should not silently edit the PDF. It should document the error, issue a credit note or replacement invoice through the accounting system, correct any VAT return affected and notify the customer. If the initial non-taxation was wrong because the service was tied to French property or a French fixed establishment, the company should quantify the tax and late consequences before issuing a new document. The correction trail is part of the evidence.
B. Which declarations, currency rules and controls should a foreign founder follow?
Not charging French VAT does not mean that the transaction disappears from the French company’s compliance system. The company should identify the correct line in its VAT return for non-taxable operations and retain the supporting records. The French tax authority’s official guidance on services supplied between taxable persons indicates that a service to a customer outside the European Union is reported as a non-taxable operation rather than treated as an ordinary French-taxable sale. The exact return line depends on the company’s tax regime and the form in force. Article 287 of the CGI sets out the declaration framework; the current Article 287 text should be read with the current form instructions.
For many French businesses, the practical return is a CA3 or a CA12. CA3 is the monthly or quarterly VAT return used by the normal regime; CA12 is the annual return used in the simplified regime. The letters are names of French tax forms, not separate taxes. A service outside French VAT may be shown in the non-taxable operations area, commonly associated with line E2 on the CA3, but the accounting team must verify the current form and software mapping. The company should not put the amount into the taxable turnover line merely because the customer paid in dollars, and it should not omit the amount solely because no VAT was collected.
A French VAT identification number is also not a universal “French VAT applies” switch. Article 286 ter of the CGI addresses the individual identification number assigned to a taxable person. A French company may need a VAT number for reporting, acquisitions, imports or other operations even though a particular invoice to a US business carries no French VAT. The official Article 286 ter reference should be distinguished from the territorial rule in Article 259.
The reverse-charge rule in Article 283 is another provision that should be read by category, not used as a slogan. It can allocate liability in specified operations, including some services received from foreign suppliers and certain domestic situations. The current Article 283 of the CGI does not turn every invoice from France to a US customer into an “autoliquidation” invoice. The company should cite Article 283 only when the conditions of the relevant paragraph are met.
Monthly controls should reconcile four separate populations: invoices with French VAT, invoices outside French VAT, credit notes and amounts received in advance. The accounting ledger should retain the legal basis selected for each population. A simple code such as “259-US-B2B” can be useful internally, provided the code is backed by a written policy and does not replace the invoice wording or evidence. The controller should review exceptions: French property, on-site work, event admission, a new French group entity, B2C sales and customers who stop answering the status questionnaire.
Foreign founders often assume that the VAT file is the only French compliance issue created by a US-client contract. It is not. The Kbis is the French commercial-register extract; the INPI is the French National Institute of Industrial Property, which operates the one-stop business formalities process; the greffe is the commercial registry office. URSSAF is the body that collects most French social-security contributions, and BODACC is the Official Bulletin of Civil and Commercial Announcements. Those institutions do not decide the place of supply for a US-client invoice, but a change in director, employee, registered office, group structure or insolvency status can change the operational facts that the VAT file must describe.
The contract should anticipate those changes. A customer representation can state that the named US entity is acting for its business, identify its US establishment, disclose any French fixed establishment involved in the project and require notice before the receiving entity changes. A clause can also allocate responsibility for US sales tax, withholding, customs, information reporting and any local registration. That allocation binds the parties contractually; it does not prevent a French or US tax authority from applying its own mandatory rules. The company should therefore ask US counsel or a US tax adviser whether the service creates a US filing, sales-tax or permanent-establishment issue.
Where the service is delivered through software, the company should describe the product accurately. A licence, hosted access, implementation, maintenance, training and data-processing service may not share the same VAT analysis in every factual configuration. The customer’s location, the user’s location and the place where an event or physical work occurs may matter. The invoice should use a statement of work that separates these deliverables. “SaaS” means software as a service, but the acronym itself does not answer the territorial question.
Where the customer refuses to give business-status information, the company has a commercial choice, but it should not pretend that the missing evidence does not matter. It can request a certificate, a signed representation or a revised contract. It can price the risk into the engagement, pause the relevant invoice or obtain a written tax opinion. If it charges French VAT as a precaution, it must then account for that VAT correctly; precautionary collection is not always economically neutral and may create a customer-refund issue. The correct response depends on the service, the amounts and the customer’s real structure.
A pre-invoice checklist can be short and still effective:
- identify the legal customer and confirm whether it acts for an economic activity;
- identify the establishment that receives and uses the service;
- screen the service for French property, event, catering, transport, on-site or B2C exceptions;
- select the legal basis, separating Article 259 territorial non-taxation from Article 293 B franchise treatment and Article 283 reverse charge;
- place the correct French wording on the invoice and give an English explanation where useful;
- map the transaction to the correct CA3 or CA12 reporting line;
- save the customer-status, contract, delivery and payment evidence; and
- set a review date for any change of entity, French office, service scope or 1 September 2026 transition impact.
This checklist is also useful during a tax audit. The company can show the legal rule, the facts known when the invoice was issued, the documents collected, the return treatment and any later correction. A tax auditor may disagree with the classification, but a documented method gives the company a clear way to defend or correct the position. The objective is not to find a magic sentence; it is to make the legal conclusion traceable from the customer and service facts to the invoice and return.
Finally, a foreign-owned French company should make its VAT process resilient to personnel changes. The person who negotiated the contract may be in the United States, while the French accountant prepares the CA3 and an external provider issues the invoice. The file should be understandable without the founder’s private mailbox. A one-page tax memo for each recurring customer, a link to the relevant contract, a record of the last status confirmation and a dated transition review can prevent a routine monthly invoice from becoming an unexplained tax exposure.
Conclusion
A French company can often invoice a US business without French VAT when the service is a qualifying B2B service received by the customer’s establishment outside France. The conclusion depends on the recipient’s status, the receiving establishment and the nature of the service. It is not established merely by the customer’s US mailing address, dollar payment or lack of a French VAT number.
The practical file should connect the legal customer, the US business evidence, the absence or presence of a French receiving establishment, the service deliverables and the invoice wording. For the ordinary non-taxable B2B result, the key line is “TVA non applicable – art. 259-1 du CGI”. Article 259 A exceptions, B2C rules, the French franchise, reverse-charge provisions, reporting forms and the September 2026 legislative transition must be tested separately. The company should preserve a correction trail and keep the French return consistent with the invoice.
For a foreign founder, the safest operating model is a short customer-status questionnaire, a contract clause covering the receiving establishment, a dated evidence file and a pre-invoice review whenever the service or entity changes. That process protects the company’s French compliance position while leaving US sales-tax and permanent-establishment questions to the appropriate US adviser.
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