Clarification for chain transactions
The question of which reduced VAT rate applies to prepared food products often raises issues, especially in chain transactions involving several intermediaries. A recent clarification from the French Tax Authorities, published in BOI-RES-TVA-000205 on 19 November 2025, provides practical guidance for affected businesses.
In a typical chain transaction, a franchisee sells prepared food products to an intermediary, which then resells them to a supermarket where the final consumer makes the purchase. Although the end customer sees only one transaction, a series of successive supplies takes place for VAT purposes.
Two reduced VAT rates apply in this context:
– 5.5% for foodstuffs intended for human consumption, subject to certain exceptions ;
– 10% for prepared food sold for takeaway or delivery for immediate consumption by the final customer, excluding alcoholic beverages.
The Tax Authorities have now confirmed that only the final sale to the consumer qualifies for the 10% rate. All intermediate supplies between businesses within the chain transaction remain subject to the 5.5% rate. This is because intermediate supplies are not made for immediate consumption and do not directly benefit the final consumer.
For manufacturers, franchisees and distributors, this clarification helps ensure consistent VAT treatment across complex supply chains by clearly distinguishing between intermediate B2B supplies and the final consumer sale.
