Delivery of goods: when is it taxable in France?

by | Sep 26, 2023 | Taxes, VAT | 0 comments

VAT, or Value Added Tax, is a crucial tax for businesses in France. However, its application depends on the place where the commercial transactions are deemed to take place. For deliveries of goods, territoriality rules vary depending on the situation. In this article, we’ll explore the different situations that determine VAT taxation in France.

Goods delivered as is

Let’s start with goods delivered as is, i.e. without additional assembly or installation. There are several possible scenarios, depending on the place of departure, the place of arrival, and the taxation of the delivery of the goods:

  • If delivery takes place in France to any destination (France, European Union member state or third country), French VAT applies.
  • If the supply takes place from another EU member state to France, then the VAT of the other member state applies.
  • In the case of deliveries from non-EU countries to France, French VAT applies, notably for the delivery of imported goods when the seller opts for VAT on importation, and for any subsequent deliveries.
  • In the absence of shipment or transport, French VAT applies if the goods are made available to the purchaser in France; otherwise, no French VAT is payable.

Sales on board means of transport

Sales on board ships, planes or trains to other EU member states or third countries are subject to specific rules. If the sale takes place from France to another Member State, French VAT applies. On the other hand, if the sale takes place from France to a third country, it is exempt as an export.

These rules apply to tangible personal property intended for sale in stores or boutiques located on board these means of transport. Deliveries of goods intended for the provisioning of means of transport are excluded. However, sales of goods for consumption on board are not subject to VAT.

Deliveries of natural gas, electricity, heat and cooling

Specific rules apply to deliveries of natural gas, electricity, heat and cooling. In general, VAT is charged in France if the goods are actually consumed or used in France. In other cases (e.g. purchase-resale without use in France), VAT is taxed in France if the purchaser has an economic activity in France, a permanent establishment or his usual place of residence in France.

Intra-Community acquisitions

Lastly, for intra-Community acquisitions of tangible personal property, the place of acquisition is France if the goods are in France at the time of arrival of the shipment or transport to the purchaser. An exception applies if the goods are not shipped or transported to France, but the purchaser has provided his French VAT identification number.

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