VAT Guide in France – How to fill out your french VAT return (CA3) and avoid common mistakes

Discover our guide to correctly reporting most of your purchases and sales in France, within the European Union, or internationally on your French VAT return.

The main lines of the VAT return (CA3) for the sale of goods and services
Taxed sales and services: Line A1

This refers to the net amount (excluding VAT) of all your taxable sales in France that constitute your revenue:

– Intra-community deliveries and exports that are taxed because they do not meet the exemption conditions.

– Sales of services under the general rule, invoiced to a company established in France

– Sales of services under a specific rule, taxable in France (e.g., services related to a property located in France)

– Sales of goods delivered in France (except for special regimes such as VAT-exempt sales)

Intra-community deliveries to a taxable person (B to B
sales): Line F2

An intra-community delivery refers to the delivery of goods sent or transported by the seller, the buyer, or on their behalf, to another EU Member State, intended for a taxable person or a non-taxable legal entity acting as such.

Stock transfers are treated as intra-community deliveries.

For intra-community deliveries and similar transactions to be exempt from French VAT, four conditions must be cumulatively met:

– The goods must leave French territory, destined for another Member State (pay attention to transport documentation!).

– The goods must be sent or transported by the seller, the buyer, or on their behalf (beware of chain transactions!).

– The buyer must have a valid VAT number within the European Union, issued by a Member State other than France (make sure to obtain and verify it before the sale!).

– The seller must report the sale in a VAT recapitulative statement (beware of late or incomplete filings!).

When the conditions are met, the goods are invoiced without VAT. The seller must then report the net amount (excluding VAT) of the transaction in line F2 of the French VAT return.

Common mistake: Companies often tend to invoice their European clients without VAT for goods deliveries without ensuring that the exemption conditions are met. However, if the conditions are not fulfilled (e.g., invalid client VAT number, lack of transport documentation), it is essential to charge French VAT to the client and report the transaction in line A1. Otherwise, in the event of a tax audit, the authorities may reject the VAT exemption applied and demand the unpaid VAT along with penalties and late payment interest.

Exports outside the EU: Line E1

An export refers to the delivery of goods sent or transported from France to a country outside the European Union by the seller, the buyer not established in France, or on their behalf.

For exports to be exempt from French VAT, two conditions must be cumulatively met:

– The goods must leave the fiscal territory of the European Union, destined for a third territory or third country (it is essential to keep the customs declaration issued at export as proof of the exemption).

– The goods must be sent or transported by the seller, the buyer not established in France, or on their behalf (beware of chain transactions!).

Common mistake: Often, when a company sells goods for export, it applies the VAT exemption without verifying the actual departure of the goods from the fiscal territory. However, one of the conditions for invoicing without VAT is that the goods must leave the fiscal territory. Therefore, it is essential to obtain a copy or screenshot of the electronic proof of the goods’ exit via the Export Control System (ECS). Without such proof, it is necessary to charge French VAT to the client, and the transaction must be reported in line A1 (taxable transaction).

Distance sales to non-taxable persons, taxable in another Member State (B2C): Line E3

Intra-community distance sales of goods refer to the delivery of goods transported by the supplier or on their behalf, from a Member State other than the destination Member State where the transport ends, to the buyer. All goods are subject to the intra-community distance sales regime, except for: new means of transport, goods delivered after installation or assembly, and second-hand goods, works of art, collectibles, or antiques sold under the margin scheme.

The buyer must be a non-taxable individual, or a taxable person exempt from the obligation to register for VAT (e.g., a business under the VAT exemption scheme), or a non-taxable legal entity not registered for VAT for the purposes of its intra-community acquisitions.

The net amount (excluding VAT) of intra-community distance sales of goods shipped from France to another Member State must be reported in line E3:

– for sellers who have exceeded the annual threshold of €10,000;

– for whom VAT is declared and paid via the VAT One-Stop Shop (OSS) system. Although the CA3 return instructions do not explicitly mention this, it seems consistent to also report in this section sales declared through local VAT registration, as was the case before 2021.

Note that the net amount (excluding VAT) of local sales of goods in France must be reported in line E1. Sales made in another Member State from stock located in that other Member State are not included in the CA3 return.

The main lines of the VAT return (CA3) for the purchase of goods and services

Purchases of services from a French provider or goods originating from and delivered within France (taxable transactions): deductible VAT in line 19 or 20 

These transactions are taxed in France. Provided the conditions for the right to deduction are met, this French VAT is deductible in line 19 (for capital goods) or line 20 (for other non-capital purchases) of the French VAT return.

Purchases of services from a supplier not established in France: Line A3

In line A3, you must declare services received from a non-established provider that are taxable in France under Article 259-1 of the French General Tax Code, and for which the buyer is liable for VAT under Article 283-2 of the French General Tax Code.

In practice, this concerns services that are taxable at the place of the customer’s establishment under the general rule, purchased from a foreign provider. The French company must self-assess the VAT in France (both collecting and deducting it simultaneously, considering the company’s right to deduction).

Example: advertising services, provision of personnel, rental of tangible movable property, certain consulting services, R&D organization, etc.

Intra-community acquisitions (taxable transactions): Line B2

An intra-community acquisition is defined as obtaining the power to dispose of tangible movable goods as an owner, when these goods are transported by the seller, the buyer, or on their behalf from another EU Member State to France.

The transactions concerned by line B2 must meet the following conditions:

– A transfer of the power to dispose of the goods as an owner
– The shipment/transport of the goods from another EU country to France

It is important to note that other transactions are treated as intra-community acquisitions (e.g., the introduction into France of company stock transferred from another Member State; the introduction into France of goods that were imported under the “42” customs procedure in another Member State; sales in France of goods introduced under the consignment stock simplification regime).

Intra-community acquisitions and similar transactions must be reported in line B2 (taxable intra-community acquisitions) of the French VAT return.

Note – if you are liable for the EMEBI (monthly statistical report on intra-community trade) upon introduction, you must also include these introductions in your response to the monthly survey on intra-community trade of goods (EMEBI).

Common mistake: A French company may purchase goods from a company established in another EU country. This French company then resells the goods to a client, a company established in another EU country, different from both France and the supplier’s country. For logistical reasons, the goods are delivered directly from the supplier’s country to the final client, without passing through France. It is common in such a scenario for the company to mistakenly declare this transaction as a taxable intra-community acquisition in France for the purchase, and an intra-community delivery for the resale. However, since the goods do not transit through France, these operations fall outside the scope of French VAT. In fact, these transactions may benefit from a simplification regime (the triangular transaction simplification regime, subject to strict conditions). In other cases, the transaction may require VAT registration in the country of arrival or departure of the goods to properly report the purchase and sale operations.

Imports other than petroleum products (taxable transactions): Line A4

An import of goods refers to transactions meeting the following conditions:

– The goods enter the European VAT territory from a country outside the fiscal territory of the European Union.
– Before arrival, the goods are not yet in free circulation within the EU, meaning they have the status of ‘non-Union goods.’
– Upon entering the fiscal territory, the goods are not awaiting a customs procedure or placed under certain special regimes such as external transit, storage (warehouse or free zone), active processing, or temporary admission with total exemption from customs duties.

Unless under a special regime (petroleum products, VAT-exempt purchases, VAT-exempt imports), these transactions must be reported in line A4 of the French VAT return (CA3).

Since the generalization of VAT self-assessment on imports in 2022, line A4 of the French VAT return is pre-filled by the tax authorities.

Common mistake: Companies often declare the amount from the supplier’s invoice for imported goods in line A4. However, the taxable base for the importation of goods is the customs value, which differs from the supplier’s invoice. It is therefore essential to obtain customs documents at the time of import to determine the customs value (box 47 of the Customs Declaration) and verify the amounts pre-filled by the tax authorities. Similarly, some companies rely on the supplier’s invoice date to declare the import. However, VAT becomes due upon the customs clearance of the goods, not on the invoice date. It is essential to wait for the customs clearance before reporting the import in the French VAT return, even if clearance occurs in a different month from invoicing. Finally, it is particularly important to keep the customs declaration at import, as this document serves as the basis for exercising the right to deduct the VAT due on imports. 

The main lines of the VAT return (CA3) for making adjustments to previous periods

Credit notes related to taxable transactions in France that were previously reported on lines such as A1, B2, or A4 should be reported on line B5 “Adjustments.”

Credit notes related to non-taxable transactions in France that were previously reported on lines such as F2 or E1 should be reported on line F8 “Adjustments.”

Common mistake: Companies often mistakenly deduct adjustments on the lines corresponding to the original transactions. Example: A company incorrectly deducts from line F2 (total amount of intra-community deliveries) for a given period all credit notes related to intra-community deliveries that occurred in previous periods.

In reality, the company should have reported the amount on line F8, which is dedicated to adjustments.

Discover our services

VAT Solutions offers a range of services to assist you with your VAT-related challenges in France and internationally:

– Diagnostic of your VAT organization, your flows, and the methods for preserving proof of exempt operations, as well as assessing the impact of new VAT rules;

– Confirmation of the VAT treatment of your flows;

– Coaching/training;

– Management of VAT obligations in Luxembourg and abroad: assistance, preparation, and submission of VAT identification requests and VAT returns.

Contact us

Phone number: + 33 6 12 37 32 22

Email: info.fr@vat-solutions.com

For more content, check out our LinkedIn page here.