French VAT Changes 2023

There have been several changes to VAT in France in 2023. Here are some key highlights of the updates to the French VAT system:

Expansion of the reduced VAT rate

The reduced VAT rate of 5.5% for COVID-19 protection materials and products will now be extended until December 31, 2023. This includes masks, some hygiene products, and protective clothing. Foodstuffs intended for consumption by food-producing animals as well as products of agricultural origin, fish, fisheries, and poultry farming will also have the reduced VAT rate of 5.5% applied.

Ecommerce VAT reform

In line with European Union (EU) directives, France has introduced significant reforms in VAT regulations for ecommerce transactions. Starting from 2023, online marketplaces will be held jointly liable for the payment of VAT in France on sales made by third-party sellers using their platforms. This measure aims to tackle VAT fraud and ensure fair competition between ecommerce businesses.

Green tax incentives

France continues to prioritize environmental sustainability by introducing green tax incentives. The VAT in France on electric vehicles (EVs) has been reduced to encourage their adoption, making them more affordable for consumers. Additionally, the installation of energy-saving materials, such as thermal insulation and energy-efficient windows, is subject to a reduced VAT rate of 5.5%.