You run your French company from London, New York, Dubai or Singapore. The Kbis, the official identity certificate of your company issued by the greffe, the registry office of the French commercial court, is in hand, the company is entered in the RCS, the Registre du commerce et des sociétés, the French Trade and Companies Register, and the first invoices are about to go out. Then your accountant in Paris asks a question you did not expect: where is your French VAT number, and which of your sales must carry French VAT? VAT, the taxe sur la valeur ajoutée, is the tax your company collects from its customers on behalf of the French Treasury and pays back after deducting the VAT it paid on its own purchases. For a company run from abroad, VAT is where distance hurts most, because the rules depend on where the customer sits, whether the customer is a business or a consumer, whether your turnover stays below the French exemption thresholds, and whether your company has a stable establishment in France. Get one of these answers wrong and the reassessment arrives years later with interest and penalties, sometimes with an 80 percent surcharge for hidden activity. This article walks a foreign founder through the whole French VAT life of a French company managed from abroad: when French VAT applies and when the exemption for small turnovers protects you, how the French VAT number works, what a compliant French invoice must contain, which returns to file and when, and how to fix mistakes before the tax office finds them. It continues our general guide for foreign founders on choosing the right French vehicle, SAS, SARL, branch or subsidiary, from abroad, and it assumes the company already exists, because VAT comes right after registration in the life of the business.

I. When your French company owes French VAT and needs its VAT number

A. Which sales of your French company carry French VAT when you live abroad

French VAT starts with two questions: is your company a taxable person, and is the transaction located in France? The article 256 A of the Code général des impôts, the French General Tax Code, states: “Sont assujetties à la taxe sur la valeur ajoutée les personnes qui effectuent de manière indépendante une des activités économiques mentionnées au cinquième alinéa, quels que soient le statut juridique de ces personnes, leur situation au regard des autres impôts et la forme ou la nature de leur intervention.” In plain English, anyone who independently carries on an economic activity of producer, trader or service provider is a VAT taxable person, whatever the legal form of the company and whatever its position for other taxes. Your SAS or SARL is therefore a taxable person from its first sale, even if you manage it from another continent and even if it makes losses. The article 256 of the same Code adds: “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.” Only supplies of goods and services made for consideration by a taxable person acting as such fall within VAT, which means transfers without consideration, purely internal movements and the personal activity of the founder outside the company stay out, while every sale to a customer falls in.

The second question is location, and it is the one foreign founders get wrong most often. For services sold to business customers, the rule is simple and brutal: the place of taxation follows the customer. The article 259 of the Code général des impôts provides: “Le lieu des prestations de services est situé en France : 1° Lorsque le preneur est un assujetti agissant en tant que tel et qu’il a en France : a) Le siège de son activité économique, sauf lorsqu’il dispose d’un établissement stable non situé en France auquel les services sont fournis ; b) Ou un établissement stable auquel les services sont fournis ; c) Ou, à défaut du a ou du b, son domicile ou sa résidence habituelle”. When your French company bills a German company established in Berlin for consulting, the place of the service is Germany, French VAT does not apply, and the invoice goes out without French VAT under the reverse charge mechanism, with both VAT numbers shown. When the same French company bills a French company established in Lyon, the place is France and French VAT at 20 percent, the standard rate, or at the reduced rate of the sector, applies. For services sold to private consumers, the mirror rule applies: the place follows the supplier, so services your French company sells to individuals are normally taxed in France. Sales of goods follow their own logic based on transport: goods shipped from France to a business customer in another European Union member State leave France without French VAT as an intra-Community supply declared in the European sales statement, while goods sold to French customers carry French VAT. Distance sales of goods to consumers in other member States are taxed in the State of arrival once the European threshold of 10,000 euros of cross-border sales to consumers is exceeded, through the One-Stop Shop, the OSS, the European portal that lets a company declare the VAT of all member States in one return. Foreign founders who sell software, courses or subscriptions online from their French company must map every flow against these rules before invoicing, because the wrong VAT treatment on thousands of small invoices becomes a reassessment multiplied by thousands of lines.

Who pays the VAT to the Treasury depends on whether the supplier is established in France. The article 283 of the Code général des impôts states: “La taxe sur la valeur ajoutée doit être acquittée par les personnes qui réalisent les opérations imposables”. The supplier normally pays. But the same article continues: “Lorsque les prestations mentionnées au 1° de l’article 259 sont fournies par un assujetti qui n’est pas établi en France, la taxe doit être acquittée par le preneur”. When the supplier is not established in France, the French business customer self-assesses the VAT, the autoliquidation, the reverse charge, and the foreign supplier invoices without French VAT. This distinction is exactly where groups with a French subsidiary and a foreign parent go wrong, as two court decisions show. In a ruling of 15 June 2023, the Conseil d’État, the French supreme administrative court, held: “le redevable de la taxe sur la valeur ajoutée afférente est le prestataire qui les fournit s’il est lui-même établi en France.” That sentence comes from the decision of the Conseil d’État of 15 June 2023, no. 465719, Worldwide Euro Protection. The Court added: “Doit être regardé comme tel le prestataire qui a en France un établissement stable depuis lequel les prestations sont fournies et qui présente un degré suffisant de permanence et une structure apte, du point de vue de l’équipement humain et technique, à rendre possibles, de manière autonome, les prestations de services considérées.” A Luxembourg company that supplied administrative, financial, tax, legal and IT services to its two French subsidiaries and let the subsidiaries reverse charge the VAT was held to be itself established in France through a stable establishment inside its French subsidiary, and therefore itself liable for the VAT, with an 80 percent surcharge for hidden activity on top. Two years of management fees became a full reassessment because the group had chosen the wrong payer. The Bordeaux administrative court of appeal reached the same conclusion for a Slovak subcontractor installing solar panels in France between 2010 and 2013, whose manager and commercial organisation were in Gironde while the head office was a shell in Slovakia: more than 98 percent of turnover made in France, quotes and contracts drafted in French from the manager’s home in Lormont, and direction exercised permanently from France. The court held the company established in France and liable for over 2.1 million euros of VAT for four years. That ruling is the judgment of the Bordeaux administrative court of appeal of 21 November 2023, no. 21BX02701, Technical Systems SRO. For a foreign founder, the lesson is direct: if you run your French company so closely from your French premises, your French staff or your French home that the business looks established in France, the company pays French VAT as an established supplier and cannot hide behind reverse charging by its customers. Structure the establishment question before the first invoice, not after the audit.

B. How the small-turnover exemption and the French VAT number work from abroad

France exempts small businesses from charging VAT through the franchise en base, the exemption for small turnovers, and many foreign founders can use it in their first year. The article 293 B of the Code général des impôts provides: “les assujettis établis en France bénéficient d’une franchise qui les dispense du paiement de la taxe sur la valeur ajoutée”. The exemption applies when the turnover made in France stays within the ceilings: 85,000 euros for the previous calendar year for sales of goods, and 37,500 euros for services other than sit-down food sales and accommodation, with current-year tolerance ceilings of 93,500 euros for goods and 41,250 euros for services. When one of the current-year ceilings is exceeded, the exemption stops for transactions from the date of the excess, and the company must charge VAT from that day and register for a VAT number immediately. Invoices issued under the exemption must carry the French VAT exemption notice referring to article 293 B of the CGI, and the company cannot deduct the VAT on its own purchases while exempt, which means the exemption is a bad deal for a founder who invests heavily before selling, for example fitting out premises or buying equipment. Compare the two positions before choosing: exemption means no VAT to charge and simpler returns, but no deduction of input VAT; taxation means charging VAT and filing returns, but recovering the VAT on investments. The choice is declared to the SIE, the Service des impôts des entreprises, the French business tax office of the company’s registered office, and it can be revisited as turnover grows. A founder who expects to exceed 37,500 euros of services in year one often opts out of the exemption from the start to recover input VAT and avoid switching invoicing systems mid-year.

The French VAT number itself, the numéro de TVA intracommunautaire, the intra-Community VAT number starting with FR plus two digits plus the nine-digit SIREN company number, is issued by the SIE after registration, not by the commercial court that issues the Kbis. The article 286 ter of the Code général des impôts states: “Est identifié par un numéro individuel : 1° Tout assujetti qui effectue des livraisons de biens ou des prestations de services lui ouvrant droit à déduction”. Every taxable person making supplies that give a right to deduct is identified by an individual number, and that number must appear on every invoice for intra-European transactions, on the European sales statements and on the VAT returns. For a company formed through the Guichet unique, the single online business registration portal run by the INPI, the Institut national de la propriété industrielle, the French industrial property office, the VAT number usually arrives automatically a few weeks after the Kbis, once the SIE processes the file. From abroad, founders should count four to eight weeks between the Kbis and the active VAT number, check its validity on the European VIES database before invoicing intra-European customers, and never invent a number while waiting: invoices issued without a valid number must be corrected once the number arrives. Foreign founders who need the registration pushed through or a late file fixed from abroad can call Maître Reda Kohen at +33 6 46 60 58 22, with an initial telephone consultation at 80 EUR TTC, to review the SIE file, the thresholds and the invoicing position before the first return falls due. The VAT number is also the key to imports and intra-Community acquisitions: a French company that buys goods in Germany for its French stock declares an intra-Community acquisition in France, self-assesses French VAT on the purchase and deducts it on the same return, a neutral operation when the company has a full right to deduct, but one that must still be declared line by line.

II. How to invoice, file and fix French VAT from abroad without fines

A. What a compliant French invoice contains and how electronic invoicing reaches founders abroad

Every VAT position your company takes must appear on the invoice, because the invoice is the document auditors read first. The article 289 of the Code général des impôts states: “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”. An invoice must be issued for every sale to another taxable person or non-taxable legal person, for every advance payment received, and for every intra-Community supply, and self-billing by the customer is allowed only under a prior mandate accepted by the supplier. The mandatory mentions follow: date of issue, sequential invoice number, SIREN number and VAT numbers of supplier and customer for intra-European sales, full names and addresses, quantity and precise description of goods or services, unit price excluding tax, applicable VAT rate, VAT amount per rate, total excluding and including tax, date of the supply or of the advance payment, and, where relevant, the legal reference for the exemption or reverse charge, such as the franchise en base notice or the words “autoliquidation” with the customer’s VAT number for cross-border business services. Two invoicing mistakes dominate reassessments of companies run from abroad: missing VAT numbers on intra-European invoices, which destroys the exemption of the supply, and the wrong rate, 20 percent instead of 10 or 5.5 percent, or VAT charged on a transaction located abroad. Each wrong invoice must later be corrected with a credit note, an avoir, and a replacement invoice, and the correction must be tracked in the accounts, because the tax office reconciles invoices, returns and bank movements during every audit.

Electronic invoicing, the facturation électronique, is changing how these invoices travel. France is rolling out mandatory electronic invoicing between taxable persons, with structured formats that carry the VAT data directly to the tax administration alongside the commercial invoice. Large companies went first, and the obligation extends progressively to small and medium businesses, with the official timetable published on the impots.gouv.fr portal and the service-public.fr business pages. For a founder abroad, the practical consequence is that PDF invoices sent by email will no longer be enough for domestic business sales: invoices must pass through a compliant platform, a PDP, a plateforme de dématérialisation partenaire, a certified dematerialisation platform, or the public portal, which transmits the invoice to the customer and the VAT data to the administration. Founders should ask their accountant now which platform the firm uses, connect the billing software before the deadline of their company size, and keep the foreign billing tool only if it produces compliant French formats with all mandatory mentions. The platform archives the invoices for the ten-year retention period, the délai de conservation of ten years that applies to commercial and tax documents, which matters for a founder whose papers sit in two countries. Keep one archive in France with the accountant, accessible to the tax office, and stop deleting old invoices from cloud drives, because a missing invoice series during an audit is treated as a missing receipt book and fined accordingly.

B. Which VAT returns to file, when to pay, and how to correct before the audit

Once registered for VAT, the company files periodic returns and pays the VAT due, and the calendar depends on the tax regime. The article 287 of the Code général des impôts 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.” Every VAT taxable person identified with a VAT number must file the prescribed return with its tax office within the regulatory deadline. Under the régime réel normal, the standard monthly regime, the return, the CA3, is filed monthly with the VAT paid each month, and quarterly filing is allowed when the annual VAT due stays below 4,000 euros. Under the régime simplifié, the simplified annual regime for smaller turnovers, one annual return determines the VAT of the year with two half-yearly advance payments, the acomptes semestriels, in July and December, adjusted the following year. The choice between regimes follows turnover and is managed with the SIE, and a fast-growing foreign-run company often moves from simplified to monthly filing within two years. The taxable moment follows the article 269 of the Code général des impôts, which fixes the chargeable event: “Au moment où la livraison, l’acquisition intracommunautaire du bien ou la prestation de services est effectué”. VAT becomes due when the supply is made, with specific rules for services paid over time and for advance payments, which means deposits received before the service trigger VAT immediately on the amount of the deposit. From abroad, founders should fix three reflexes: close the monthly sales figures on the same day each month so the accountant can file on time, pay by SEPA direct debit from the French business account to avoid cross-border transfer delays, and never let the accountant file a nil return, une déclaration néant, for a month with sales, because a false nil return is far worse than a late correct one.

Alongside the VAT return, European transactions generate their own statements. Intra-Community supplies of goods to business customers in other member States are reported line by line in the état récapitulatif, the European sales statement filed on the same portal, with the customer’s VAT number and the amounts per customer. Intra-Community acquisitions are declared on the CA3 itself. Services sold to business customers in other member States under the reverse charge are reported in the European services statement, the DES, the déclaration européenne de services. Each statement has its own deadline and its own fines, and the statements are cross-checked automatically between member States through the VIES system, so a French supply declared in France but never declared by the German customer, or the reverse, triggers a query. Late or missing statements cost 750 euros per breach, raised to 1,500 euros after a formal notice, plus 15 euros per omission with a cap, on top of the VAT itself. A founder abroad should reconcile every month the accounting software, the VAT return and the European statements before filing, and keep the transport documents for goods, the CMR consignment notes, delivery slips and the customer’s valid VAT number at the date of the supply, because the exemption of an intra-Community supply depends on proving the goods actually left France.

When a mistake is found, correcting early changes everything. A company that forgot to charge VAT after exceeding the franchise thresholds, applied the wrong rate, omitted an acquisition or filed late can still file a corrective return, pay the missing VAT with late interest, currently 0.20 percent per month, and limit penalties to the standard 5 percent late surcharge plus interest. The danger zone starts when the administration discovers the activity itself. The Conseil d’État recalled in the Worldwide Euro Protection case: “l’application délibérément erronée du régime de l’autoliquidation ne pouvait tenir lieu de déclaration”. Deliberately applying the wrong reverse charge cannot count as filing, and the company that never registered, never filed and never told the commercial court or the tax office of its French activity faces the qualification of activité occulte, hidden activity, with the 80 percent surcharge. The rule recalled by the Conseil d’État in the same decision of 15 June 2023 applies: “80 % en cas de découverte d’une activité occulte”. The difference between a 5 percent correction and an 80 percent reassessment is therefore the founder’s own initiative: register before selling, file even when the figures are uncertain with a return to be corrected later, answer every SIE letter within the deadline, and disclose a French establishment rather than letting the auditor discover the Paris office, the French employee and the French server during a visit. Keep every VAT return, invoice, contract, transport document and VIES check for at least ten years in an archive the accountant can produce, diary the monthly filing date, the two advance payment dates under the simplified regime and the annual return date, and treat every letter from the SIE as a deadline, because in VAT, as the two court cases above show, the founder who declares first pays the tax, while the founder discovered by the administration pays the tax plus the surcharge.

Conclusion

French VAT for a company run from abroad holds together when five links are solid. The company is a taxable person from its first sale, and every transaction is located before it is invoiced: French business customer means French VAT charged by the company, foreign business customer means reverse charge abroad, consumer sales follow the supplier or the One-Stop Shop once the European threshold is crossed. The franchise en base exempts turnovers below 85,000 euros for goods and 37,500 euros for services, with current-year tolerances of 93,500 and 41,250 euros, but it blocks input VAT deduction and stops on the day of the excess. The VAT number arrives from the SIE after the Kbis and must be validated on VIES before the first intra-European invoice. Every invoice carries the full mandatory mentions with the correct rate and the correct legal reference, and electronic invoicing through a certified platform is becoming the only accepted channel for domestic business sales. Returns follow the regime, monthly CA3 under the standard regime or annual return with two advances under the simplified regime, plus the European statements for cross-border flows, with transport proof kept for every exempt intra-Community supply. Above all, the establishment question decides who pays: a foreign group with a real stable establishment in France pays French VAT as an established supplier and cannot shift the burden to its customers through reverse charge, and hiding the establishment turns a 5 percent correction into an 80 percent hidden-activity surcharge. Run these five links from abroad with an accountant who files on time, and French VAT becomes a routine monthly exercise rather than the reassessment that finds the founder years later.