Eligibility for refund
A foreign taxable person is entitled to recover French VAT if the following conditions are satisfied:
- The company is not registered in France or is registered only for Intrastat purposes (i.e. the business does not have to file VAT returns in France);
- The company does not have residence, its seat or a fixed establishment in France;
- The company has not carried out any taxable supplies in France, except for:
- Certain tax-exempt cross-border transportation or ancillary services from/to non-EU countries;
- Supplies for which VAT is due by the recipient in accordance with the rules in the EU VAT package;
- Supplies of goods/services made by a non-established entity to a VAT-registered recipient in France and subject to the domestic reverse charge mechanism;
- Supplies made under a VAT suspension regime;
- Telecommunications, radio and television broadcasting and electronic services, rendered to non-taxable customers that are established in France;
- The Administrative Supreme Court ruled on 7 December 2015 that a VAT refund claim must be made by the company heading a VAT group (established outside France). If the head company or any company in the group is VAT-registered in France, the situation is more complex. An analysis must be made on a case-by-case basis;
VAT cannot be recovered on:
- Accommodation costs incurred on behalf of the management or staff of the company. (VAT is recoverable when such expenses are incurred for the benefit of persons not employed by the company, provided the expenses are incurred in the interest of the company or when it supplies the same services for consideration);
- The supply, import, leasing, repair, and maintenance of most cars for passenger transport and other related costs.
However, VAT is recoverable on the purchase price where the car is purchased by a car dealer for resale or by a person leasing cars. In addition, 80% of the VAT on diesel used for vehicles and machines excluded from the right to deduct VAT and leased vehicles (where the lessee cannot deduct the VAT), and since January 1st, 2018, 20% of the VAT on gasoline is recoverable. This last percentage will be modified so that to align the recovery of VAT diesel and gasoline. For example, it is forecasted that the non-deductible proportion on gasoline will be progressively reduced as follows: 60% in 2019, 40% in 2020 and 20% in 2021.
VAT refund claims can be filed on a quarterly or an annual basis. If a quarterly refund claim is made, the amount of refundable VAT must be at least EUR 400. If an annual claim is made, the amount must be at least EUR 50.
A quarterly VAT claim is filed for a three-month period (except at the end of the year where a refund can be filed for a shorter period) for input VAT incurred during that period. The refundable VAT is determined based on the tax point taking place during that period.
Minimum amounts and frequency of filing
A VAT refund claim may be filed on a quarterly or an annual basis.
- A quarterly claim must be submitted during the month following each calendar quarter (e.g. by 31 October 2018 for input VAT incurred during the third calendar quarter of 2018). The refundable VAT must correspond to the transactions for which the tax point occurred during the relevant quarter (in practice, however, invoices relating to the previous quarters of the same year can be included in the relevant quarterly VAT refund claim). The amount of refundable VAT must be at least EUR 400.
- A VAT refund claim also can be made on a calendar year basis, provided the amount of refundable VAT is at least EUR 50.
The VAT refund claims must be filed before 30 June of the calendar year following the year in which the VAT claimed was due. Late claims are not accepted
There is no general threshold for the submission of an electronic copy of an invoice. However, where the invoice relates to fuel costs, the threshold for providing a copy is EUR 250. The tax authority can request additional documents/information (e.g. original invoices).