How does VAT work ?
Value-added tax (VAT) is a tax applied to most goods and services. It is paid on every transaction at every stage of the manufacturing process, but eventually VAT is beared by the final consumer and the role of businesses is to collect the VAT for the tax administration. Companies deduct the VAT paid on their purchases and investments from the amount of VAT they collected on their sales. If the VAT amount paid on purchases exceeds VAT collected on sales, the resulting VAT credit can be reclaimed. This standard procedure is applicable to all European countries.
If your company has no permanent establishment in the EU, and you want to buy and/or sell in Europe you will need a fiscal representative, who will get registered on your behalf, and will substitute to your company for all the European tax obligations.
VAT rate
In France, the standard VAT rate on goods and services is 19.6%, calculated on the net price: if net price= 100€ then Price VAT included = 119,60€ (Euros).
Reduced rates apply to a number of cases, such as foods, certain farm products( 5.5%), drugs (5.5% or 2.1%), books, hotels, newspapers and magazines, certain leisure activities.
Although the same principles apply across Europe, VAT rates differ from a European country to another (please enquire with us). Harmonization of rates is on the way. As a member of the International VAT Association,
its can coordinate with other European partners (see
Partners ).
