Fiscora

Applying the correct VAT rate to every transaction seems like a simple obligation, but it’s a frequent source of errors and tax reassessments. France applies four distinct VAT rates, the application of which depends on the nature of the good or service supplied, and sometimes on where it is consumed or the conditions of sale.

The four VAT rates in force

• 20% — the standard rate, applicable by default to most goods and services.
• 10% — an intermediate rate, notably for restaurant services, certain renovation works and passenger transport.
• 5.5% — a reduced rate, for everyday food products, energy and certain equipment for disabled people.
• 2.1% — a special rate, reserved for a limited number of transactions, including certain reimbursable medicines.

Sectors that deserve particular attention

Some sectors combine several rates within a single activity: the restaurant sector distinguishes between food consumed on the premises (10%) and takeaway food intended for immediate consumption, and applies the 5.5% rate to certain non-alcoholic beverages. The new-build housing and energy renovation sector benefits from reduced rates subject to conditions on the works carried out and their performance. An incorrect classification exposes a business to a VAT reassessment on the rate difference, plus applicable penalties.

Securing the correct rate application

A regular review of your product and service catalogue, your invoicing and point-of-sale settings, along with monitoring legislative developments (reduced rates are frequently amended), helps limit the risk of an audit on this point.

Fiscora’s support

We carry out sector-specific VAT rate reviews and help our clients configure their invoicing and point-of-sale tools.