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This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
 Definition
VAT permanent establishment
Services supplied by a VAT-liable person resident in France to a customer resident in France
Services supplied by a VAT-liable person resident in France to a customer resident in another EU member state.
Services supplied by a VAT- liable person resident in France to a customer resident outside EU
Services supplied from outside the EU into France.
Services supplied by a VAT- liable person resident in another EU member state to a customer resident in France.
 Definition of “Services”
“Services” for e-commerce purposes are services supplied by internet without any physical delivery. Most of services are software, automated data processing, web site design, access to data base, services regarding science, education, leisure, culture, art, etc…
VAT permanent establishment
For VAT purposes, the residency is the place where are located for a sufficient period of time the human resources and the technical tools necessary to perform the services. The mere maintenance in France of a web site and/or a server, without a physical presence of employees does not constitute a VAT permanent establishment.
The French tax analysis is closed from the position of the EU court of Justice.
Services supplied by a VAT-liable service provider resident in France to a customer resident in France
These e-services are liable to French VAT according to general VAT rules applicable to any supply of services.
Services supplied by a VAT-liable person resident in France to a customer resident in another EU member state.
When the customer is liable to VAT in another EU member country (B to B), the customer should self assess and pay the VAT at the rate applicable in his country.
When the customer is not liable to VAT in another EU country (B to C), the supplier will apply the French VAT.
Services supplied by a VAT liable person resident in France to a customer resident outside EU
When the customer is established outside the EU, the service is not subject to French VAT.
Services supplied from outside the EU into France
When the customer is liable to VAT in France (B to B), he will self assess the VAT at the French rate. The service provider is joint and several liable for the VAT owed by the French customer.
When the customer is not liable to VAT in France (B to C), the service provider must apply the French VAT. As of July 1st, 2003, the service provider must be registered in one EU member country he will select and pay on a quarterly basis in each jurisdiction the VAT he collected in each EU member country. The input VAT is refundable according to a specific procedure.
All necessary formalities can be carried out on the official web site of the French tax authorities "TVA e-service" http://www.pce.dgi.minefi.gouv.fr/avert.php
FLASH: ECOFIN agreed to extend the period of application of the VAT regime applicable to e-services, radio and television broadcasting services for 6 additional months i.e. until December 31, 2006. A Directive to that effect will be adopted soon.
Services supplied by a VAT-liable person resident in another EU member state to a customer resident in France.
When a customer is liable to VAT in France (B to B), he will self assess and pay the VAT at the rate applicable in France. The service provider is joint and several liable for the VAT owed by the French customer.
When the customer is not liable to VAT in France (B to C), the supplier will apply the VAT of his EU member country.
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