France: VAT rules on composite TV Service Offers: BOFIP Guidance of 3 September 2025
On 3 September 2025, the French tax authorities published guidance clarifying the VAT treatment of television services, distinguishing between linear and non-linear content.
- Linear services, understood as programmes broadcast according to a fixed schedule, qualify for the reduced 10% VAT rate.
- By contrast, non-linear services, such as video-on-demand (VOD) or subscription-based streaming (SVOD), remain subject to the standard 20% VAT rate.
For composite offers combining both types of services, the key question is whether they can be separated from the subscriber’s perspective. The entire offer may benefit from the reduced rate if non-linear services are merely ancillary. However, suppose the services are inseparable (such as under a single flat-rate subscription or where no opt-out option exists). In that case, the highest VAT rate among the included services applies, in most cases 20%.
To establish separability, the subscriber must be able to opt out of the non-linear part of the contract at any time. Additional factors include contract duration, individual pricing of each service, and whether certain services are optional.
This guidance places increased responsibility on service providers to carefully structure their offers. Contracts must clearly differentiate between linear and non-linear elements, ensure transparent pricing, and limit the reduced rate to services that genuinely qualify. Otherwise, operators risk VAT reassessments, interest, and penalties for the improper application of the reduced rate.
