France - Country Commercial Guide

Discusses pricing formula and other fees, value-added tax (VAT), etc.

Last published date: 2019-10-13

France is a highly competitive market in which the French importer is looking for the best quality at the lowest price.  American products and technology are highly regarded but do not command higher prices than comparable products.  It is important to remember that while France is a significant market in its own right, it is also one of the ports of entry to the European Union and associate country-members for many imports with final destinations all throughout Europe and other overseas markets.  This characteristic gives local buyers access to a wide range of products at competitive prices.

U.S. companies are advised to quote prices on a Cost Insurance Freight (CIF) basis, surface or airfreight.  This is standard practice for most exporters since it facilitates price comparison between EU suppliers.  Import duties are usually quoted on a delivered to warehouse basis.
Value Added Tax (VAT)
The EU’s VAT system is semi-harmonized.  While the guidelines are set out at the EU level, the implementation of VAT policy is the prerogative of Member States. The EU VAT Directive allows Member States to apply a minimum 15% VAT rate, however, they may apply reduced rates for specific goods and services or temporary derogations. Therefore, the examination of VAT rates by Member State is strongly recommended.  These and other rules are laid out in the VAT Directive.

The EU applies Value Added Tax (VAT) to sales by non-EU based companies of Electronically Supplied Services (ESS) to EU-based non-business customers.  U.S. companies that are covered by the rule must collect and submit VAT to EU tax authorities. From January 1, 2015, all supplies of telecommunications, broadcasting and electronic services are taxable at the place where the customer resides. In the case of businesses, this means either the country where it is registered or the country where it has fixed premises receiving the service. In the case of consumers, it is where they are registered, have their permanent address, or usually live.

As part of the legislative changes of 2015, the Commission launched the Mini One Stop Shop (MOSS) scheme, the use of which is optional. It is meant to facilitate the sales of ESS from taxable to non-taxable persons (B2C) located in Member States in which the sellers do not have an establishment to account for the VAT.
This plan allows taxable persons (sellers) to avoid registering in each Member State of consumption. A taxable person who is registered for the Mini One Stop Shop in a Member State (the Member State of Identification) can electronically submit quarterly Mini One Stop Shop VAT returns detailing supplies of ESS to non-taxable persons in the other Member States (the Member State(s) of consumption), along with the VAT due.

The Commission has received numerous complaints in relation to the new rules on ESS and is in the process of revising them (draft proposal).
The most important pieces of legislation on VAT are the EU VAT Directive 2006/112/EC and its Implementing Regulation 282/2011.

Further information relating to VAT on ESS:

Key links to French VAT:  Value Added Taxe Rates in France – French Ministry of economy
French VAT System & Revenue Efficiency (EU Economic Brief July 2016).pdf