VAT and France

The supply of ‘assembled or installed goods’ for VAT purposes is when the contract with the customer requires that the goods are installed or assembled for them. Typically this will involve complex equipment that requires the assistance of the supplier to make it functional at a particular location - for example, installing studio recording equipment at a customer’s premises.

It would not matter if the assembly or installation work were a relatively minor element of the whole supply, as long as it was a contractual requirement. Nor would it matter if the supplier were to sub-contract the assembly or installation work to a third party.

In such cases, the country of supply for VAT purposes is where the installation or assembly of the goods is carried out. Goods that are transferred from the UK to France for the purpose of being installed or assembled there are not treated as normal VAT exports from the UK, nor are they treated as transfers of own goods.

France allows a simplified procedure to operate, which can avoid the need for a UK business to register for VAT in France solely due to installing or assembling goods there, when these conditions are met:

• The UK business is registered for UK VAT;
• The UK business has no establishment in France; and
• The customer is registered for TVA in France.

The UK business has no liability to VAT or TVA if all the above conditions are met, and certain France-based administrative procedures are complied with. The value of the supply still needs to be included in boxes 6 and 8 of the regular UK VAT return.

Where any of the conditions are not met, the UK supplier may need to register for French TVA, as it is making a supply in (rather than to) France.

Was this page useful? Bookmark it or tell others...