You live in London, New York, Dubai or Singapore. You have just formed a French SAS (societe par actions simplifiee, the flexible joint-stock company most foreign founders choose) or a SARL (societe a responsabilite limitee, the limited liability company with stricter governance), or you run French sales through a branch of your foreign company. The Kbis arrives (the Kbis is the official registration certificate issued by the greffe, the clerk of the commercial court, proving your company legally exists), the bank account opens, and then your accountant asks the question that decides whether your invoices are legal: what is your French VAT position?
VAT (value added tax, called TVA, taxe sur la valeur ajoutee, in France) is the tax your French company collects on its sales, deducts on its purchases, and pays to the French Treasury. For a founder living abroad, the subject is full of traps: a company registered in France does not automatically hold an active intra-Community VAT number, distance sales to French consumers follow specific thresholds, services sold to foreign clients follow place-of-supply rules, and late registration or late returns trigger automatic surcharges plus late interest. This guide explains, in practical terms, when your French vehicle needs a French VAT number, which filing regime applies, how to register, file, pay and reclaim VAT from abroad, and what late filing or wrong invoicing costs and how to challenge it. It is written for business readers: every French acronym is explained, every decisive statement is tied to the exact article of the French Tax Code (Code general des impots, CGI) with a link to the official Legifrance version in force.
Two companion guides cover the mirror situation, a foreign company selling into France without any French entity: registering for French VAT after a first taxable sale, including the fiscal representative and French VAT registration, OSS returns and fixing penalties for a foreign seller without a French company. This guide covers the opposite case: you already hold a French SAS, SARL or branch and live abroad.
If you have not yet chosen your vehicle, read first the companion guide on choosing between a SAS, a SARL, a branch and a subsidiary in France as a foreign investor, which explains why the VAT answer differs between a French company and a mere branch.
I. Does your French company need a French VAT number and which regime applies?
A. When French VAT applies to a company owned from abroad
The starting point is simple. Article 256 of the French Tax Code provides that: “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 English: supplies of goods and services made for consideration by a taxable person acting as such are subject to VAT. The full official text is here: Article 256 of the Code general des impots on Legifrance. A French SAS or SARL that sells goods or services in France is therefore, as a rule, a taxable person (assujetti), even if its shareholder and its president live abroad. Ownership from abroad changes nothing; what matters is where the transactions take place.
For services, the decisive question is the place of supply. Article 259 of the Tax Code states: “Le lieu des prestations de services est situé en France” Official text: Article 259 of the Code general des impots on Legifrance. In practice, this produces the two situations foreign founders meet every week. First, your French company invoices a French business client: the service is located in France and French VAT applies. Second, your French company invoices a business client established in another European Union country that holds a valid EU VAT number: the service is generally located in the client’s country, your company invoices without French VAT, and the client accounts for the tax under the reverse-charge mechanism. The mirror rule matters too: when a supplier established outside France provides services covered by Article 259 A to your French company, Article 283 of the Tax Code provides that “la taxe est acquittée par l’acquéreur, le destinataire ou le preneur qui agit en tant qu’assujetti et qui dispose d’un numéro d’identification à la taxe sur la valeur ajoutée en France.” Official text: Article 283 of the Code general des impots on Legifrance. In plain terms, your French company self-assesses French VAT on services it buys from abroad. Many foreign founders discover this reverse charge on their first consulting, software or intra-group management invoice, and the general principle that VAT “doit être acquittée par les personnes qui réalisent les opérations imposables” in the same Article 283 on Legifrance remains the default whenever no reverse charge applies.
For goods, the logic is territorial as well. A French company that stores goods in France and delivers them to French customers carries out domestic supplies subject to French VAT at the applicable French rate (20 percent standard rate for most goods and services, with reduced rates for specific categories). A French company that sells goods to consumers in other EU countries must watch the EU-wide distance-sales threshold of 10,000 euros per year: below it, under conditions, the seller may charge the VAT of its home country; above it, VAT is due in the customer’s country, either through registration there or through the EU One-Stop Shop (OSS, the EU-wide portal that lets a business declare VAT due in several EU countries through a single return filed at home). A French company that imports goods from outside the EU pays import VAT, which it can generally deduct if it holds the customs documents. Exports outside the EU and intra-Community supplies to VAT-registered EU businesses are generally exempt with a right to deduct, provided the documentary conditions are met: valid VAT number of the customer checked through the VIES system (VAT Information Exchange System, the EU database for checking VAT numbers), proof of transport, and correct invoicing mentions.
Three frequent misunderstandings deserve a direct answer. First, the SIREN and SIRET numbers (SIREN is the nine-digit company identifier, SIRET the fourteen-digit establishment identifier issued by INSEE, the French statistics institute) are not VAT numbers. Your intra-Community VAT number, starting with FR followed by two digits and your nine-digit SIREN, is issued by the SIE (service des impots des entreprises, the corporate tax office your company depends on) after registration, and it must be active before you invoice EU clients without VAT. Second, opening a French branch (succursale, a secondary establishment of the foreign company without its own legal personality) instead of a subsidiary does not remove the VAT question: a branch that carries out taxable transactions in France is identified for VAT in France. Third, holding companies with only dividend income and no economic activity may sit outside VAT, but any French operating company with French customers, French suppliers, French stock or French premises should assume VAT applies and verify its position with the SIE rather than assume it is outside the system.
The administration explains the practical registration and regime logic on its official portals, which you should bookmark alongside the statutes: the public service guide to VAT obligations for professionals on service-public.fr, VAT (TVA) for businesses and the tax administration portal for companies on impots.gouv.fr, professional section. These pages do not replace the statutes, but they give the current forms, thresholds and filing calendars the SIE applies.
B. Which VAT regime your French company falls into: normal, simplified or exemption
Once VAT applies, your company falls into one of three situations: the standard real regime (regime reel normal), the simplified real regime (regime reel simplifie), or the basic exemption (franchise en base de TVA, the scheme that releases small businesses from charging VAT). The classification depends on turnover and on your choices, and it decides how often you file and how you pay. Foreign founders often ignore this step because the accountant handles it, but the regime determines your cash position and your penalty exposure, so you should understand it.
The standard real regime is the default for larger businesses and the regime most foreign-owned operating companies end up under. Article 287 of the Tax Code states: “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.” Official text: Article 287 of the Code general des impots on Legifrance. The same article adds: “Les redevables soumis au régime réel normal d’imposition déposent mensuellement la déclaration visée au 1 indiquant, d’une part, le montant total des opérations réalisées, d’autre part, le détail des opérations taxables.” Same Article 287 on Legifrance. In practice, the return is the CA3 (the standard monthly or quarterly VAT return form used under the normal regime). VAT due is paid monthly, or quarterly if the annual VAT due is below a set amount and the company opts for it. The advantage is precision: you deduct input VAT quickly and your account reflects reality each month. The constraint is discipline: twelve returns a year, each with a deadline, each visible to the SIE.
The simplified regime suits smaller companies. The company files one annual return (the CA12 form) and pays two instalments (acomptes) during the year, with a balance on the annual return. It reduces paperwork but demands cash anticipation: the instalments are calculated on the previous year, and a fast-growing company can owe a large balance. The company can opt for the normal regime at any time if monthly precision serves it better, for instance when it regularly accumulates VAT credits on investment or export activity.
The basic exemption releases qualifying small businesses from charging VAT: they invoice without VAT, do not file VAT returns, but cannot deduct input VAT either. The thresholds differ between sales of goods and services and are adjusted periodically, so verify the current figures on the official portals before relying on them. The exemption is incompatible with deducting VAT on large start-up investments, which is why many foreign founders who fit computers, fit-out works or initial stock deliberately opt out of the exemption from day one: paying VAT on sales is the price of recovering VAT on heavy start-up costs. The option is exercised with the SIE and produces effects under conditions of date and duration that your accountant confirms in writing.
Two cross-border specifics complete the picture. If your foreign parent company has no French establishment but carries out taxable transactions in France (for example direct sales from foreign stock, or services deemed located in France), it may need to register directly for French VAT without creating a French company, appointing a fiscal representative (representant fiscal, the France-based person liable for the foreign company’s French VAT obligations) where the law requires it, typically for companies established outside the EU. If instead you operate through a French company, that company holds its own French VAT number and files its own returns; the parent does not file French VAT for the subsidiary’s transactions. Confusing the two levels is a classic source of double declarations or missing declarations in groups, and the SIE corrects it through reassessment.
II. How to register, file, pay and fix VAT mistakes from abroad?
A. How to get the VAT number, file returns and reclaim VAT from abroad
Registration starts at creation. Article 286 of the Tax Code requires every taxable person to file a declaration with the office designated by order within fifteen days of starting operations, using the form provided by the administration. Official text: Article 286 of the Code general des impots on Legifrance. The same article adds that the taxable person must provide, on the administration form, all information about its professional activity. Same Article 286 on Legifrance. In current practice, a French company is created through the Guichet unique (the single online company-registration portal run for the State, which replaced the former CFE network), and the file circulates to INSEE (SIREN/SIRET), the RCS (registre du commerce et des societes, the commercial register kept by the greffe) and the SIE. The intra-Community VAT number is then issued by the SIE. In practice, allow several days to several weeks, and do not invoice EU business clients without VAT until the number is issued and verifiable in VIES. If your number is delayed while contracts press, ask your counsel or accountant to confirm in writing whether you may invoice with French VAT provisionally and credit later, rather than invoicing without VAT on an unconfirmed number.
Filing and payment are fully electronic. VAT returns (CA3 monthly or quarterly, CA12 annually under the simplified regime) are filed online through the impots.gouv.fr professional account, and payment is made electronically by the same channel. From abroad, organise access early: the professional account requires credentials tied to the company, and the legal representative (president of the SAS, gerant of the SARL, or the branch representative) validates the mandates given to the accountant (expert-comptable, the regulated accounting professional) for filing and payment. Companies that chose the simplified regime calendar their two instalments and the annual balance; companies under the normal regime calendar twelve monthly deadlines (or four quarterly ones). Add the European declarative obligations where relevant: the EMEBI survey (the monthly statistical survey on intra-EU goods movements, which replaced the former DEB, declaration d’echanges de biens) for goods movements within the EU above thresholds, and the European services declaration for intra-EU services to EU business clients. These are statistical and control documents distinct from the VAT return, and missing them draws its own penalties.
Invoicing discipline is the daily face of VAT compliance. Article 289 of the Tax Code requires every taxable person to ensure that an invoice is issued, by them or in their name and on their behalf by the customer or by a third party. Official text: Article 289 of the Code general des impots on Legifrance. Each invoice must show, among other mentions, the identities and VAT numbers of supplier and customer, the date, a sequential number, the quantity and nature of goods or services, the price excluding VAT, the VAT rate, the VAT amount, and where applicable the legal mention justifying the absence of VAT (reverse charge, intra-Community supply, export, exemption). France has moved toward mandatory electronic invoicing (facturation electronique) between taxable businesses, with a phased timetable published by the administration: verify the current phase for your company size on impots.gouv.fr and organise your billing tool accordingly. From abroad, impose a single invoicing template, a single numbering sequence, and a rule that nobody invoices outside the tool. Most VAT reassessments the author sees in small foreign-owned companies start with parallel Word or Excel invoices that the accounting never sees.
Reclaiming VAT (input VAT deduction and refunds) is where foreign founders either save or lose real money. A company under the normal regime deducts the VAT on its French business purchases directly on its CA3, within the legal conditions: the expense must serve taxable operations, the company must hold a compliant invoice, and specific exclusions apply (notably on certain vehicles, fuel and hospitality, with detailed rules your accountant applies line by line). When deductible VAT exceeds collected VAT, the company holds a VAT credit (credit de TVA): it can carry it forward to the next return or request a refund under conditions of amount and frequency. Exporters and companies making intra-Community supplies accumulate credits structurally because they invoice without VAT while paying VAT on their French costs; for them, the monthly normal regime plus regular refund claims is usually the right setting. Companies established outside France that incur French VAT without being registered (hotel nights, trade fairs, services) may recover it through the EU refund portal of their home country if established in the EU, or through the thirteenth-directive procedure if established outside the EU, subject to reciprocity and to appointing a representative where required. Keep every invoice, customs document and proof of payment: a refund without documents is refused, and the refusal arrives months after the expense.
A short operational checklist closes this part. First, confirm with the SIE that the intra-Community number is issued and active, and print the VIES check. Second, confirm the regime in writing (normal monthly, normal quarterly, simplified, exemption with or without option) and calendar every deadline with a backup payer if you travel. Third, lock the invoicing template with all mandatory mentions and the e-invoicing format. Fourth, separate the flows: domestic French sales with French VAT, EU business sales with customer VAT number verified, distance sales to EU consumers with OSS or local registration, exports with transport proof. Fifth, file the EMEBI and services declarations where due. Sixth, claim VAT credits on time with complete files. Each of these steps can be handled from abroad through the online accounts, provided mandates and credentials are set before the first deadline.
B. What late filing, wrong invoices or missing VAT cost and how to challenge
The price of delay is automatic. Article 1727 of the Tax Code states: “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.” Official text: Article 1727 of the Code general des impots on Legifrance. Late interest runs by the month on the VAT paid late, even without any bad faith. On top of interest, Article 1728 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” Official text: Article 1728 of the Code general des impots on Legifrance. The rate is 10 percent without a formal notice or with filing within thirty days of the notice, and 40 percent beyond. A company that files its CA3 two months late therefore owes the VAT, the monthly late interest, and the surcharge. The SIE applies this mechanically; goodwill does not cancel it, though a reasoned request for remission (remise gracieuse, the discretionary relief the administration may grant on penalties and in some cases interest) can be filed for penalties where the file shows an isolated error, prompt correction and good compliance history.
Inaccuracies draw heavier surcharges. Article 1729 provides: “Les inexactitudes ou les omissions relevées dans une déclaration ou un acte comportant l’indication d’éléments à retenir pour l’assiette ou la liquidation de l’impôt ainsi que la restitution d’une créance de nature fiscale dont le versement a été indûment obtenu de l’Etat entraînent l’application d’une majoration de” Official text: Article 1729 of the Code general des impots on Legifrance. The rate is 40 percent for deliberate failure and 80 percent for abuse of law (abus de droit, the procedure targeting artificial arrangements), reduced in defined cases. For VAT, typical inaccuracies include deducting VAT without a compliant invoice, applying the wrong rate, omitting reverse-charge VAT on foreign services, or claiming exemption on intra-Community supplies without transport proof. Each line can be adjusted, and each adjustment carries interest plus the surcharge matching the qualification. This is why the invoicing and archiving discipline described above is not paperwork for its own sake: at audit, the company that produces numbered invoices, VIES checks of the day, transport documents and bank proofs negotiates the qualification of errors; the company with gaps pays the higher rate.
Specific VAT failures carry their own fines. Missing or incorrect EMEBI and European services declarations, missing sequential invoice numbering, and missing mandatory invoice mentions each expose the company to specific fines under the Tax Code, independent of the VAT itself. Operating without VAT registration when registration was due leads the SIE to assess the VAT directly (taxation d’office, the procedure allowing the administration to assess where returns are missing) and to apply the late and inaccuracy consequences on top. For foreign groups, the administration also watches permanent-establishment questions: a foreign company that repeatedly claims to act from abroad while its French team negotiates and concludes contracts in France may be treated as having a French taxable presence, with VAT, corporate tax and payroll consequences examined together.
When a VAT assessment or penalty arrives at your French registered office while you live abroad, act on the time limits, not on surprise. The first step is reading the proposal (proposition de rectification, the document setting out the adjustments envisaged) and the response deadline, usually thirty days, with a right to request explanations and to be heard. The second step is correcting what can be corrected: file the missing returns, pay the principal to stop interest running, and gather the missing proofs (invoices, VIES checks, transport documents, customs paperwork, contracts). Paying does not waive the right to challenge; it limits the cost while you argue. The third step is the formal challenge (reclamation, the written claim filed with the tax office), which must state the facts, the legal grounds with the exact articles, and attach every proof. If the SIE rejects the claim in whole or part, the dispute goes to the administrative court (tribunal administratif, the first-instance court for tax disputes) within the appeal deadline stated in the rejection. Throughout, correspond through the online messaging of the professional account so every sending date is recorded, and keep a French address for service that is actually monitored: many default assessments against companies owned from abroad become final simply because the registered-office mail was never opened.
Prevention remains cheaper than challenge. Calendar every CA3 or CA12 deadline with payment, verify each new EU customer number in VIES before the first invoice without VAT, stamp every export and intra-Community file with its transport proof before closing the month, reconcile the accounting turnover with declared turnover each quarter, and have the accountant confirm the regime and the options in writing each year. Companies that do this from abroad spend a few hours a month on VAT; companies that discover VAT at audit spend months and pay interest and surcharges that no argument recovers.
Conclusion
A French company owned from abroad is fully inside French VAT: it identifies under Articles 256 and 259, it collects or self-assesses under Article 283, it declares within fifteen days of starting under Article 286 and files under Article 287, it invoices under Article 289, and it pays interest under Article 1727 with surcharges under Articles 1728 and 1729 when it is late or wrong. The founder who registers early, chooses the regime deliberately, locks invoicing, files electronically from abroad and archives every proof turns VAT into routine administration. The founder who invoices without a verified number, files late or deducts without documents turns it into reassessment with interest and surcharges. Paris practice shows the difference is rarely the tax rate; it is the method, applied every month, from the first invoice.