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Beginning January, 1st 2014, and in accordance with article 68 of Law 2012-1510 29th December 2012, the French Government has announced the amendment of the valued added tax (VAT) rates.

*Please note the following information is today being treated in the French Council of Minister and might be subject to immediate changes (of which you will be rightly informed).



Beginning January, 1st 2014, and in accordance with article 68 of Law 2012-1510 29th December 2012, the French Government has announced the amendment of the valued added tax (VAT) rates.


Under the new law, the VAT rates will be as follows:


• Former 19,60% standard VAT rate will increase to 20%

• Former 7% intermediate VAT rate will increase to 10%

• On standby the foreseen reform of the 5,5% reduced VAT rate into 5% due to its cancelation by the National Assembly.

• CORSICA Former 8% reduced VAT rate will increase to 10%




This is the rate applied automatically whenever there is no specific law appointing any other rate and covers the sale of all manufactured goods, real estate construction and most services.




This increase is applied to all chargeable events starting January 1st 2014. For deliveries of goods, since the transfer of ownership is both the chargeable event and the point of chargeability to tax, if it took place before January 1st 2014, the rate applied will remain 7%. Delivery triggers liability for VAT and so, if done during year 2013, the payment is not summited to the new VAT rate. However, this exception is not applied to supplies of services, for which chargeability to tax occurs when the price is paid, and therefore summited to the new rate of 10% if this it’s done after January 1st, 2013. The former rate of 7% would only be authorized after 2014 if there had been a previous agreement for VAT to be chargeable on a debit basis, for example, liable for tax when the invoiced is issued




The reduced VAT rate covers products and services specially listed in the Tax Code.




Please note that Corsica and the French Overseas Departments benefit from special reduced VAT rates that have also been modified. In Corsica there will be an increase from 8% to 10% to all chargeable events starting January 1st, 2014. For now there is no implementation guidance on the French VAT change, however companies need to consider the French VAT rules and start changing the rate on the provision of goods or services. In particular, the correct rates for ongoing services.


Updated December 2013 - The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as at the date it is received or that it will continue to be accurate in the future. No individual or company should act on such information without appropriate professional advice after a thorough examination of the particular situation.


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