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FREQUENTLY ASKED QUESTIONS/VAT - What is VAT?/

Entrepreneurs

What is VAT?

VAT stands for Value Added Tax : it is a consumption tax.

This general tax applies to most business transactions involving goods and services that are sold or bought in the European Union and is eventually borne by the final consumer.

The rate of VAT differs in each country in the European Union, but it ranges from 5 to 27%.

In France, there are 3 different rates, but the regular one is 20%. As a result, if you are contemplating selling goods or services in France, you will be required to register for Value Added tax.

Many businesses are legally required to register for VAT, but any business can also register for VAT voluntarily. The benefits of VAT registration are various, but Alf makes a point of stressing some of the main perks:

  • VAT can be applied to the sale cost of almost all goods and services offered (you can read more about the different tax rates applicable according to the nature of the good here).
  • You can claim VAT refunds on most goods or services purchased from other businesses.
  • Being VAT registered can give to your business a good image as it can give the appearance of a well-established company. Indeed, you usually have to reach a certain threshold of turnover in order for your VAT registration to be mandatory. Besides, you will have a VAT number that will appear on your invoices, and any other stationery, which can give to your business credence towards other firms who are more likely to deal with companies that are VAT identified.

alf assists you in registering your company for VAT. To discover our offer, please visit our page on your VAT paperwork.

Read more:

Alf and your VAT paperwork

The different VAT rates applicable in France

Why resort to a tax agent?

Is french VAT registration necessary?

What is a tax representative?