The French Finance Act for 2026 introduces a significant change with the creation of Article 273 septies E of the French Tax Code. Until now, the free distribution of goods in a promotional context was considered to preclude VAT deduction, regardless of the underlying business purpose. This restrictive approach was rooted in the civil law...
In this ruling, the Conseil d’État clarified the VAT treatment of payments made under trade cooperation arrangements, reaffirming the distinction between price reductions and remuneration for services. The dispute concerned amounts paid by suppliers to distributors under trade cooperation agreements covering product placement, in-store promotions and marketing activities. These payments had been presented as commercial...
The French Finance Act for 2026 harmonises the VAT rates applicable to household waste collection and treatment services. With effect from 1 March 2026, all household waste collection and treatment services are subject to a single reduced VAT rate of 5.5%. This brings to an end the previous patchwork of different rates depending on the...
Ruling of 24 February 2026, n° 497507 The Conseil d’État ruled on the scope of the VAT reverse charge mechanism applicable to subcontracting in the construction sector under Article 283, 2 nonies of the French Tax Code. The mechanism applies where services are directly linked to a construction, renovation, transformation or demolition project. The...
In this ruling, the Court of Cassation clarified the liability of a logistics provider for import VAT where customs formalities are carried out by an intermediary. A company had instructed a logistics provider to handle its customs clearance under a so-called “express” mandate. Following irregularities in the import declarations, French Customs held the provider liable...
Under Article 275 of the French Tax Code, businesses can import goods free of VAT provided those goods are destined for exempt transactions typically exports or Intra-Community supplies of goods. Until now, claiming VAT relief at importation meant issuing a specific notice known as the “A.I.2 form“, which had to be handed to suppliers and...
The French Finance Bill for 2026 has been adopted and introduces a new €2 flat fee on low-value parcels imported from non-EU countries. The measure will apply from 1 March 2026. The fee applies to all consignments with an intrinsic value not exceeding €150. It is separate from customs duties and VAT and is intended...
In a judgment dated 15 January 2026, the Administrative Court of Nice dismissed the claims brought by the US company Imperial Business LLC and confirmed its liability to French corporate income tax and VAT for the years 2011 to 2018. At the heart of the case lies a consistent principle: tax treatment follows economic reality,...
In a decision dated 16 December 2025, the Bordeaux Administrative Court of Appeal clarified the criteria used to distinguish between a supply of goods and a supply of services for VAT purposes. This distinction is critical, as it determines both the applicable VAT treatment and the timing of VAT becoming due. The case concerned Laser...
In a decision dated 23 October 2025, the Administrative Court of Martinique reaffirmed that the right to deduct VAT is subject not only to substantive conditions, but also to strict reporting formalities, including where errors are corrected through amended VAT returns. The case concerned the company Foyalbaz, which challenged the refusal of the French Tax Authorities...
In a ruling published on 14 January 2026, the French Tax Authorities clarified the VAT treatment applicable to diploma verification services provided by a company established in France via an online platform. These services fall under the standard VAT place-of-supply rules. When supplied to private individuals, French VAT is due as soon as the service provider is established in France, even...
On 14 January 2026, the French Tax Authorities issued a clarification on how the VAT reverse charge applies to the resale of electricity and gas. In short, when energy is sold to a business acting as a reseller, the supplier does not charge VAT. The reseller accounts for the VAT itself through its VAT return....
