Overview of VAT between the UK and France
As France and the UK are fellow states of the EC, there are complicated VAT rules affecting business carried out between the 2 countries. This page outlines the main issues as they apply to a small UK business.
‘France’ includes Monaco and Corsica, but excludes Martinique, French Guiana, Guadeloupe, Reunion, and St Pierre et Miquelon. The Channel Islands are neither part of France nor the UK for VAT purposes.
French VAT is called ‘Taxe sur la Valeur Ajoutée’, or ‘TVA’. It should not be confused with VAT in the French-speaking areas of Switzerland, Belgium and Luxembourg, which are also called TVA.
Exporting goods to France
A VAT-registered UK business does not need to charge VAT on most goods exported to France, provided it obtains the French customer’s TVA registration number and shows it on the invoice. It must also keep documentary proof of export.
If the French customer is not registered for TVA, then UK VAT must be charged on most exports. No VAT is chargeable on goods which would normally be zero-rated or exempt when supplied in the UK.
The UK business should regularly check whether its level of sales to TVA-unregistered customers in France requires it to register for TVA under the distance selling rules.
Importing goods from France
A UK business importing goods from France should give the French supplier its UK VAT registration number so that French TVA does not get charged.
When a UK VAT-registered business imports goods from France from a French TVA-registered business, the UK business should pay UK VAT on the import by including VAT in box 2 of its regular UK VAT return, at the appropriate UK VAT rate. It may then reclaim that same amount by including it as input VAT in box 4 of the same VAT return, subject to the normal rules about recovering input VAT.
Services with a French aspect
VAT on services with an overseas aspect is a complex area, and the situation can depend on:
- The type of service being supplied;
- The country in which the supplier belongs;
- The country in which the customer belongs;
- The country in which the service is performed;
- The country in which any relevant land is situated; and
- Whether the service is being received for a business purpose.
Reclaiming French TVA
A VAT-registered UK business which buys goods (which are not for export) or services in France may be able to reclaim any French TVA paid, by using a special refund scheme. This is available to a UK business which is not registered in France for TVA, which has no physical presence in France and does not make any supplies there. The claim is made in French using the specified form, and sent to the appropriate tax office in France together with original supporting invoices and a UK VAT66 certificate.