VATupdate

Guidance: Person liable for the tax (supplies of goods/services)

I. General principle: supplier of goods or services liable for the tax

1

Pursuant to the provisions of the first paragraph of 1 of Article 283 of the General Tax Code (CGI) , the value added tax (VAT) payable for the delivery of goods or the provision of services is normally paid by the person carrying out the operation.

When a device provides that a person is deemed to carry out an operation, it is the latter who is liable. For more details, please refer to the diagram for the purchase-resale of liable facilitators in the context of distance sales ( II § 90 to 190 of BOI-TVA-CHAMP-10-10-40-60 ) or that of opaque intermediaries ( II-B § 50 to 70 of BOI-TVA-CHAMP-10-10-40-40 ).

II. Exceptions: recipient of goods or services liable for tax

A. Services not covered by the general rules of territoriality and deliveries of goods made by a taxable person not established in France

1. Principle

10

For the supply of goods and the provision of services mentioned in article 259 A of the CGI , the tax must be paid by the purchaser, the recipient or the lessee when the latter is a taxable person acting as such and is identified VAT in France and that the supplier or service provider is not established in France, in accordance with the second paragraph of 1 of article 283 of the CGI .

20

The second paragraph of 1 of article 283 of the CGI establishes a general and mandatory system from which operators cannot derogate. This applies to all deliveries of goods and services mentioned in article 259 A of the CGI made to customers subject and identified to VAT in France, except when other provisions of the CGI define a different person liable or lay down specific terms and conditions.

30

Thus, they remain subject to their own rules:

40

Are concerned by the device of the second paragraph of 1 of article 283 of the CGI all the suppliers and service providers who are not established in France within the meaning of article 283-0 of the CGI  ( BOI-TVA-DECLA-10-10 -10 ).

All customers of these operators are likely to be affected by this system if they are taxable persons acting as such within the meaning of IB § 210 of BOI-TVA-CHAMP-20-50-20 and are identified for VAT in France, pursuant to one of the paragraphs of article 286 ter of the CGI , whether or not they themselves are established in France.

Example: A company A, established in France, sells tangible movable property in France to a company B not established in France, which then resells this property to a company C subject and identified to VAT in France. The goods are delivered directly by company A to company C. Company A is liable for the French VAT due on the first sale made for the benefit of company B. Company C is legally liable for the French VAT due on the second sale made for its benefit by company B. Company B can recover the VAT invoiced to it by company A under the conditions provided for in article 242-0 M of annex II to the CGI in article 242-0 Z decies of appendix II to the CGI .

2. Special cases

has. Import followed by internal delivery, made in France by a taxable person established outside France

50

In application of the provisions of the second paragraph of 1 of article 283 of the CGI , when a good is sent by a taxable person not established in France, from a State outside the European Union (EU) to France, in order to be subsequently delivered there as is to a customer identified for VAT in France, the non-established taxable person must pay VAT when importing the goods, in accordance with the provisions of I of Article 291 of the CGI and the purchaser identified for VAT in France is liable for the tax payable for the subsequent internal delivery.

(60-70)

b. Intra-Community acquisition (or similar transfer) followed by internal delivery made in France by a taxable person established outside France

80

When a good is sent to France by a taxable person established outside France from a Member State of the European Union, in order to be subsequently delivered to a customer identified for VAT in France, the allocation or the transfer constitute intra-community acquisitions within the meaning of article 258 C of the CGI . As this intra-Community acquisition is exempt from VAT ( CGI, art. 262 ter, II-3° ), it does not imply the obligation to submit a declaration of turnover. The customer identified for VAT in France collects the tax for the subsequent internal delivery ( CGI, art. 283, 1 ).

Example: A company A, not established in France, sends goods to France on January 2, which it resells there to a company B identified for VAT in France on April 10. Company A must record an intra-Community acquisition. This is exempt from VAT pursuant to 3° of II of article 262 ter of the CGI. Company B must self-assess the VAT relating to the internal delivery made in France. Company A recovers the VAT it bears in France for carrying out this operation giving rise to the right to deduction (VAT relating to storage costs for example) under the conditions provided for in article 242-0 M of annex II to the CGI in article 242-0 Z decies of appendix II to the CGI .

vs. Delivery of goods with assembly or installation carried out in France by a taxable person who is not established there

1° Property from another EU Member State

90

Pursuant to the provisions of the second paragraph of 1 of Article 283 of the CGI , when a taxable person established outside France introduces equipment into France, transported from an EU Member State, and intended to be assembled or installed by itself or on its behalf in France and then to be delivered to a customer identified for VAT in France, the latter is required to reverse charge the VAT relating to the delivery of this equipment after installation. It is reminded that the introduction in France of these materials is not considered as a taxable intra-community acquisition ( CGI, art. 258 C ).

Example: Company A, not established in France, sends goods to France which it intends to deliver to company B identified for VAT in France, after assembly. Company B, which is legally liable for the VAT relating to the sale of the installed asset carried out for its benefit by company A, carries out the reverse charge of this tax. Company A recovers the VAT it bears in France for carrying out this operation giving rise to the right to deduction, under the conditions provided for in article 242-0 M of annex II to the CGI in article 242-0 Z decies of Annex II to the CGI .

2° Property originating from a State outside the EU

100

When a taxable person established outside France imports into France equipment intended to be assembled or installed by himself or on his behalf in France and to be delivered to a customer identified for VAT purposes in France, he is required to submit to the VAT on the importation of equipment into France. Pursuant to the provisions of the second paragraph of 1 of Article 283 of the CGI , the customer identified for VAT in France of the foreign taxable person must reverse charge the VAT for the subsequent internal delivery from which he benefits after installation.

Example: A company A, not established in France (established in the United States), imports into France a good that it intends to deliver to a company B identified for VAT in France, after assembly. Company A pays the import VAT on a turnover declaration (CA3). Company B, which is legally liable for the VAT relating to the sale of the installed asset carried out for its benefit by company A, reverse-charges this tax.

d. Consequences of the absence of reverse charge of the tax by the customer

110

The purchaser, recipient or lessee identified for VAT in France liable for VAT under the second paragraph of 1 of Article 283 of the CGI who has not collected VAT on his turnover declaration may be the subject of an action in recovery of the administration relating to the amount of the tax for which he is liable.

However, he benefits from the deduction of the deductible tax relating to the undeclared transaction on the recalled tax, within the framework of the rectification procedure.

120

When the operation not declared by the purchaser, the recipient or the lessee identified for VAT in France entitles him to deduct the VAT relating thereto, the failure to declare this operation is penalized by the application of the fine provided for in 4 of article 1788 A of the CGI .

B. Services provided to a taxable customer and subject to the general principle of territoriality

1. Principle

130

2 of article 283 of the CGI provides that the taxable lessee within the meaning of article 259-0 of the CGI , whether it is a taxable person or a legal person not subject to VAT, is the person liable for VAT for the services referred to in 1° of article 259 of the CGI when they are provided to him by a service provider not established in France within the meaning of article 283-0 of the CGI ( IA § 1 of the BOI -VAT-DECLA-10-10-10 ).

140

Are concerned by these provisions, the provision of services which meet the following conditions:

  • be provided to a taxable person within the meaning of article 256 A of the CGI and article 259-0 of the CGI ( I § 10 to 90 of the BOI-TVA-CHAMP-20-50-10 ) who acts as such in meaning of IB § 210 of BOI-TVA-CHAMP-20-50-20 , the fact that this taxable person carries out exempt transactions or benefits from a deductible or a special scheme (flat-rate agricultural scheme, persons benefiting from a derogatory [PBRD]) having no impact;
  • be located in France in application of the general rule of 1° of article 259 of the CGI ( BOI-TVA-CHAMP-20-50-20 ). The transactions referred to in 1°, 2°, 4°, b and c of 5°, 5° bis and 8° of article 259 A of the CGI are therefore excluded  ;
  • be carried out by a service provider who is not established in France, i.e. who has neither the seat of his economic activity in France nor a permanent establishment from which the service is provided (or participating to the performance of the service) or, failing that the service is rendered from an establishment outside France, his domicile or habitual residence.

2. Details

150

The French overseas departments (DOM) and the Principality of Monaco are not considered as third territories even if relations with the DOM and Monaco may be governed by specific provisions. Also, the provisions of 2 of article 283 of the CGI are not applicable when the taxable lessee is established in a French overseas department or in Monaco and the service provider in mainland France, the latter therefore being liable for the tax. Similarly, a service provider established in a French overseas department or in Monaco who provides a service covered by the general principle of 1° of article 259 of the CGI to a customer established in metropolitan France remains liable for the tax.

160

The fact that the service provider established in another Member State has not declared the provision of services on the summary statement (corresponding to the European declaration of services) that he must file in his State of establishment does not exempt the established in France to reverse charge the VAT relating to this provision of services in accordance with the provisions of 2 of article 283 of the CGI for the period during which the chargeability of the tax occurred.

The lack of reverse charge is sanctioned under the conditions of 4 of article 1788 A of the CGI .

170

On the procedures for declaring VAT, please refer to BOI-TVA-DECLA-20-20-10 .

3. Relationship with other reverse charge provisions

180

The provisions of 2 of article 283 of the CGI result from the transposition into domestic law of article 196 of directive 2006/112/EC of 28 November 2006 relating to the common system of value added tax to which the Member States of the EU cannot derogate. Moreover, in accordance with this same directive, France has implemented other optional provisions relating to the reverse charge of VAT. This difference has consequences, particularly in terms of reporting obligations for the service provider ( II § 130 of BOI-TVA-DECLA-20-20-40 ).

The relationship between these different provisions can be summarized as follows:

Operations carried out Place of establishment of the service provider Basis of the CGI for determining the person liable
Processing services on new industrial waste and on recovered material France CGI, art. 283, 2 sex
EU State CGI, art. 283.2
Third country CGI, art. 283.2
Electronic communications services France CGI, art. 283, 2g
EU State CGI, art. 283.2
Third country CGI, art. 283.2
Transfer of greenhouse gas emission quotas or guarantee certificates of origin (CGO) and electricity capacity guarantees France CGI, art. 283, 2 septies
EU State CGI, art. 283.2
Third country CGI, art. 283.2
Subcontracting of construction works in relation to real estate France CGI, art. 283, 2 h
EU State CGI, art. 283.1
Third country CGI, art. 283.1
Other services referred to in 1° of article 259 of the CGI France CGI, art. 283.1
EU State CGI, art. 283.2
Third country CGI, art. 283.2
Other services ( CGI, art. 259 A, 1°, 2°, 4°, b and c of 5°, 5° bis and 8° ) France CGI, art. 283.1
EU State CGI, art. 283.1
Third country CGI, art. 283.1
Articulation between the different provisions of article 283 of the CGI

Third country: territory excluded from the scope of European VAT ( II-C § 150 to 190 of BOI-TVA-CHAMP-20-10 ). However, with regard to the provision of services, the overseas communities are not assimilated to third territories.

EU State: designates the part of the territory of the other EU Member States where VAT applies.

C. Deliveries of natural gas, electricity, heat or cold made by a supplier established in one State to a customer established in another State

190

The following comments apply to cross-border transactions where the supplier and its customer are established in two different countries.

1. Deliveries of natural gas, electricity, heat or cold to a purchaser identified for VAT

has. Deliveries by a supplier established outside France to a purchaser identified for VAT in France

200

When the delivery is made from a permanent establishment located outside France and the place of this delivery is located in France, the tax is due by the identified purchaser to VAT in France, pursuant to 2 quinquies of the Article 283 of the CGI .

In this situation, the supplier established outside France (non-EU country or other Member State) is exempt from any obligation in France with respect to its deliveries. The fact that the supplier also has the seat of its economic activity in France is irrelevant.

Note 1: Article 286 ter of the CGI gives the list of operators who must be identified by an individual number.

Note 2: Suppliers established outside France who make deliveries of natural gas, electricity, heat or cold subject to VAT in France for which the person liable is the purchaser identified for VAT in France can request reimbursement. VAT in accordance with the provisions of article 242-0 M of annex II to the CGI to article 242-0 U of annex II to the CGI .

b. Deliveries by a supplier established in France to a purchaser identified for VAT in another Member State

210

When the supplier is established in France and the place of delivery is located in another Member State, the tax is payable by the purchaser identified to VAT in the other Member State. The French supplier is then exempted from any obligation in this State.

2. Deliveries of natural gas, electricity, heat or cold to a purchaser not identified for VAT

has. Deliveries made by a supplier established outside France to a purchaser established or domiciled in France without being identified there for VAT

220

When the supplier, established outside France, makes a delivery to a purchaser established or domiciled in France without being identified there for VAT, the person liable for the tax due in respect of this delivery taxable in France is the supplier.

230

On the obligations incumbent on the supplier established outside France, reference should be made to BOI-TVA-DECLA-20-30-40 .

b. Deliveries made by a supplier established in France to a purchaser not identified for VAT in another Member State

240

In this case, when the purchaser is not identified for VAT in the Member State of destination of the goods, the supplier established in France is required to identify himself for VAT in this Member State in order to fulfill the reporting obligations and pay the VAT due.

D. Deliveries of natural gas or electricity made by a supplier established in France to a purchaser identified for VAT in France

1. General rules

has. Scope of the device

250

In order to prevent any “carousel” type VAT fraud on the natural gas and electricity exchange markets, 2 quinquies of article 283 of the CGI provides for a reverse charge mechanism for VAT for certain deliveries. electricity or natural gas taxable in France pursuant to III of article 258 of the CGI . Are concerned by this device, the deliveries of natural gas or electricity:

  • carried out by a supplier established in France;
  • for the benefit of a purchaser who has an individual VAT identification number in France;
  • for purposes other than their consumption by the purchaser.

The VAT relating to these operations is paid by the purchaser.

Example: A company established and identified for VAT in France which acquires electricity, to resell it, from an electricity supplier established in France must reverse charge the VAT on the electricity acquired from the supplier (this is thus, in particular, when a local distribution company [ELD] established and having an individual VAT identification number in France acquires electricity from a photovoltaic or wind power producer established and identified in VAT in France).

The resale of electricity to another company established and identified for VAT in France, for purposes other than its consumption in France by this company, is invoiced excluding tax; it is up to this new purchaser to reverse charge the VAT.

260

Conversely, the electricity or natural gas supplier established in France or the buyer-reseller who has an individual VAT identification number and who is established in France remains liable for the tax on the deliveries of natural gas or electricity when the purchaser consumes the goods delivered in France, whether or not the latter is identified for VAT in France.

The notion of consumption of these goods is specified in VB-1 § 550 of BOI-TVA-CHAMP-20-20-10 .

Example: An electricity producer acquires electricity for its own consumption from an LDC. The VAT on this delivery remains collected by the ELD.

270

When deliveries of natural gas or electricity are made to a buyer-reseller established in a French overseas department, the person liable for the tax remains the supplier when the buyer does not have an individual identification number at the VAT.

280

Furthermore, when a supplier established in France carries out, in addition to a delivery of electricity or natural gas for purposes other than their consumption in France, access services to the transport and distribution networks, transport by these networks or any other directly related services, the VAT relating to these services is also paid by the purchaser, when the latter is established and has an individual VAT identification number in France. These services are described in X § 470 and following of BOI-TVA-CHAMP-20-50-50 .

b. Methods of application of the device

290

The invoice relating to the operations concerned by the reverse charge does not mention the VAT payable.

However, it must clearly show that the VAT is due by the customer and bear the words “reverse charge”, justifying the absence of collection of the tax by the supplier established in France.

300

Customers established and identified for VAT in France mention the total amount, excluding taxes, of their purchases subject to reverse charge on the “other taxable transactions” line of their turnover declaration. The tax thus paid is deductible under the conditions of common law. Failure to declare by the customer is sanctioned by the fine provided for in 4 of article 1788 A of the CGI .

The supplier mentions symmetrically on the “other non-taxable operations” line of its turnover declaration the total amount, excluding taxes, of the operation.

Even if he does not collect the tax himself, the supplier can deduct the VAT he bears on his own expenses under the conditions of common law. This deduction may, depending on the case, take the form of a tax charge or a tax credit refund.

2. Special cases

has. Deliveries of natural gas or electricity made by suppliers benefiting from the base franchise

310

The VAT reverse charge mechanism does not apply to deliveries of natural gas or electricity made by a supplier benefiting from the basic exemption provided for by article 293 B of the CGI and following.

Thus, provided that the invoice issued by the supplier, or the document in lieu thereof, includes in particular the words “VAT not applicable, article 293 B of the CGI”, the purchaser established and identified for VAT in France, that he whether or not a final consumer, does not pay VAT on these purchases.

320

If the supplier has opted for the payment of VAT pursuant to article 293 F of the CGI , the purchaser established and identified for VAT in France becomes liable for VAT in respect of deliveries of natural gas or electricity whose they benefit for purposes other than their consumption in France.

b. Purchases for losses made by operators of electricity and natural gas transmission and distribution networks

330

When the operators of public electricity or natural gas transport and distribution networks acquire electricity or natural gas to compensate for the losses inherent in the transport and distribution operations, it is accepted that the VAT relating to these deliveries or collected by the supplier established in France on all the quantities delivered, even when a marginal fraction of these is not ultimately consumed by the network operators and is resold. The subsequent delivery of quantities not consumed will, however, fall within the scope of the reverse charge mechanism, when it is made for the benefit of a purchaser established and identified for VAT in France for purposes other than consumption in France.

vs. Self-consumption by local distribution companies

340

The supply of electricity to local distribution companies to cover the needs of end consumers in their service area is subject to the provisions of the second paragraph of 2 quinquies of article 283 of the CGI for the total amount invoiced, even if the companies distribution sites consume part of the electricity thus acquired for their own needs and to compensate for network losses.

E. Deliveries and services relating to new industrial waste and recovered materials to a customer identified for VAT in France

1. General case

350

Pursuant to 2 sexies of article 283 of the CGI , the tax relating to deliveries of new industrial waste and recovered materials, as defined in I § 10 to 60 of BOI-TVA-CHAMP-10-10- 50-60 , is payable by the customer when the latter has a VAT identification number in France. The reason for which the customer has, pursuant to one of the paragraphs of article 286 ter of the CGI , such a number is irrelevant. Conversely, if the customer is not identified for VAT in France, the person liable for the tax remains the supplier.

360

Similar rules apply to service providers providing services relating to new industrial waste or recovered materials. For the definition of these services, please refer to II § 70 and 80 of BOI-TVA-CHAMP-10-10-50-60 .

370

The invoice relating to the operations concerned by the reverse charge mechanism must not mention the VAT payable, the amount of the delivery appearing therein having to be considered as a price excluding tax which the customer must submit to VAT. The invoice must always clearly show that the VAT is due by the customer and bear the words “reverse charge” justifying that the tax is not collected by the supplier.

380

The customer identified with the VAT in France mentions on the line “other taxable operations” of his declaration of turnover the total amount, excluding taxes (HT), of the operation. In terms of tax rates, it is recalled that the rate applicable to waste is that which applies to the material from which it originates. The tax thus paid is deductible under the conditions of common law. Failure to declare by the customer is sanctioned by the fine provided for in 4 of article 1788 A of the CGI .

390

For its part, the supplier mentions symmetrically on the “other non-taxable operations” line of its declaration of turnover the total amount excluding tax, of the operation.

400

Even if he does not collect the tax himself, the supplier can deduct the VAT he bears on his own expenses under the conditions of common law. This deduction may, depending on the case, take the form of a tax charge or a tax credit refund.

2. Special case: service relating to new industrial waste and recovered materials carried out by a taxable person not established in France

410

In accordance with the provisions of 2 sexies of article 283 of the CGI , the lessee is liable for the tax relating to the services relating to new industrial waste and recovery materials, when identified for VAT in France. . The provider’s place of establishment is irrelevant.

420

However, with regard to the rules of territoriality, services relating to tangible movable property, such as new industrial waste and recovered materials, fall under the general principle referred to in 1° of Article 259 of the CGI when they are carried out between taxable persons.

430

In the event that such services are carried out by service providers not established in France, the tax is payable by the taxable lessee on the basis of 2 of article 283 of the CGI. The tax is self-liquidated by the lessee on the basis of 2 sexies of article 283 of the CGI when they are established in France.

F. Transfer of greenhouse gas emission quotas or certificates of guarantees of origin and guarantees of capacity

1. Transfer of greenhouse gas emission allowances

440

In accordance with Article 199a of Council Directive 2006/112/EC of 28 November 2006 , Member States may provide that the person liable for VAT is the taxable person to whom the transfers of allowances and reduction units mentioned in II- B § 260 to 290 of BOI-TVA-CHAMP-10-10-40-30 .

To this end, 2 septies of article 283 of the CGI provides that the VAT relating to the transfer of these rights is paid by the taxable person receiving the transfer.

Note 1: This provision only applies in practice when the service provider is established in France. Indeed, since these services fall under the provisions of 1° of article 259 of the CGI and that the service provider is not established in France, then the lessee must, in any event, self-liquidate the tax on the basis of the 2 of article 283 of the CGI ( II-B § 130 and following ).

Note 2: Emission allowances and emission reduction units are intangible personal property. The transfer of these rights constitutes a provision of services subject to VAT when it is carried out for consideration by a taxable person acting as such ( CGI, art. 256 ).

The invoice or the document in lieu relating to the operations concerned by the reverse charge will not mention the VAT payable but must show that the VAT is due by the beneficiary and bear the mention “reverse charge”.

For more details on the application of the reverse charge mechanism provided for in 2 septies of article 283 of the CGI to transactions relating to certified or verified emission reduction units (CER-VER), please refer to the BOI-RES-TVA-000075 .

2. Transfer of certificates of guarantees of origin and guarantees of capacity

has. Scope of the device

445

In accordance with Article 199a of Council Directive 2006/112/EC of 28 November 2006 , Member States may provide that the person liable for VAT is the taxable person to whom gas and electricity certificates are supplied.

To this end, 2 septies of article 283 of the CGI provides that the VAT relating to the transfer of certificates of guarantees of origin and guarantees of capacity mentioned in article L. 314-14 of the energy code ( C. energy) and article L. 335-3 of the C. energy is paid by the taxable person receiving the transfer.

Note 1 : This provision only applies in practice when the service provider is established in France. Indeed, since these services fall under the provisions of 1° of article 259 of the CGI and that the service provider is not established in France, then the lessee must, in any event, self-liquidate the tax on the basis of the 2 of article 283 of the CGI ( II-B § 130 and following ).

Note 2: Certificates of guarantees of origin and guarantees of capacity constitute incorporeal movable property. The transfer of these rights constitutes a provision of services subject to VAT when it is carried out for consideration by a taxable person acting as such ( CGI, art. 256 ).

b. Methods of application of the device

446

The invoice or the document in lieu relating to the transactions concerned by the reverse charge does not mention the VAT payable.

However, it must clearly show that the VAT is due by the customer and bear the words “reverse charge”, in application of 13° of I of article 242h A of appendix II to the CGI , justifying the absence of collection of the tax by the transferor established in France.

447

The customer mentions the total amount, excluding taxes, of his purchases subject to reverse charge on the “other taxable transactions” line of his turnover declaration. The tax thus paid is deductible under the conditions of common law. Failure to declare by the customer is sanctioned by the fine provided for in 4 of article 1788 A of the CGI .

The supplier mentions symmetrically on the “other non-taxable operations” line of its turnover declaration the total amount, excluding taxes, of the operation.

Even if he does not collect the tax himself, the supplier can deduct the VAT he bears on his own expenses under the conditions of common law. This deduction may, depending on the case, take the form of a tax charge or a tax credit refund.

G. Electronic communications services intended for a recipient identified for VAT in France

450

In order to prevent any VAT fraud of the “carousel” type in the field of electronic communications services, 2 octies of article 283 of the CGI establishes a reverse charge mechanism for VAT for transactions taxable in France pursuant to 1° of article 259 of the CGI defined as follows:

  • within electronic communications services, transactions that are not subject to the tax provided for in article 302 bis KH of the CGI on services provided by electronic communications operators;
  • provided by a service provider established in France;
  • for the benefit of a lessee who has an individual VAT identification number in France.

The VAT relating to these operations is paid by the lessee.

Note  : This provision only applies in practice when the service provider is established in France. Indeed, when these services come under the provisions of 1° of article 259 of the CGI and the service provider is not established in France, then the lessee must, in any event, self-liquidate the tax on the basis of 2 of article 283 of the CGI ( II-B § 130 and following ).

1. Scope of the device

has. Electronic communications services

1° Definition

460

“Electronic communications services” means, within the meaning of Article L. 32 of the Post and Electronic Communications Code (CPCE) , all services which, at least on a principal basis, allow the issue, transmission or reception of signs, signals, writings, images or sounds, by cable, by radio, by optical means or by other electromagnetic means.

470

Do not constitute electronic communications services, for the application of the device of 2 octies of article 283 of the CGI , in particular:

  • on-demand television, radio and audiovisual media services made available to the public or a category of the public by electronic means;
  • broadcasting or transport services for audiovisual communication services;
  • equipment rentals (modems, telephone equipment, etc.);
  • universal directory inquiry services.
2° Exclusion of electronic communications services subject to the tax on services provided by electronic communications operators

480

Among the electronic communications services as defined in II-G-1-a-1° § 460 and 470 , electronic communications services subject to the tax on services provided by operators are excluded from the VAT reverse charge mechanism. electronic communications provided for in article 302 bis KH of the CGI , that is to say the services provided in France:

  • by operators under the obligation to declare themselves beforehand to the Regulatory Authority for Electronic Communications, Posts and Press Distribution (ARCEP) under Article L. 33-1 of the CPCE ;
  • to final consumers, whether or not they are subject to VAT.

The fact that the sums paid by the end consumers as remuneration for these services did not actually bear the tax due to the reduction of 5 million euros provided for in IV of article 302 bis does not affect this exclusion. CGI’s KH.

490

The VAT reverse charge mechanism therefore applies to the services provided to each other by the providers of electronic communications services. These services do not constitute final consumption since they are acquired with a view to retail resale to final consumers, individuals or professionals, or with a view to wholesale resale to another operator. These include:

  • wholesale sales of fixed services (fixed telephone and Internet subscription, value-added services), including the supply of telecommunications services in the form of prepaid cards or top-ups;
  • wholesale sales of mobile services (voice and messaging, Internet, SMS, MMS, email, value-added services), including the supply of telecommunications services in the form of prepaid or top-up cards;
  • wholesale sales of capacity services (leased lines and data transport);
  • interconnection and access services mentioned in I of article L. 34-8 of the CPCE ;
  • unbundled access to the local telecommunications network;
  • wholesale supply of bandwidth;
  • roaming services within the meaning of 17° of article L. 32 of the CPCE .

Example 1: A virtual mobile telephone operator (MVNO) established and identified for VAT in France who acquires wholesale telephone communication minutes from a network operator, established in France, must reverse charge the VAT on this acquisition.

During the retail resale of the minutes thus acquired to its subscribers domiciled in France, the MVNO is also liable for the VAT relating to this operation, whether or not the subscribers are subject to VAT.

Example 2: When an electronic communications operator provides electronic communications services via prepaid cards or top-ups offered for sale through a network of distributors who are not required to register with ARCEP (supermarkets , tobacconists, etc.), the turnover achieved by the operator thanks to these sales is subject to the tax provided for in article 302 bis KH of the CGI. Therefore, the tax on the sale of prepaid cards or top-ups to distributors remains collected by the electronic communications operator.

Example 3: Revenues derived from the provision of a value-added number by an operator assigned a value-added number (ANVA) for the benefit of a publisher established and identified for VAT in France are subject to the tax instituted in article 302 bis KH of the CGI, the publisher being the final consumer of this service. Therefore, the VAT relating to this service is collected by ANVA.

Example 4: The sums paid by a telestore for the acquisition of telephone minutes from an electronic communications operator are subject to the tax provided for in article 302 bis KH of the CGI. Therefore, the tax on the sale of telephone minutes to a call shop remains collected by the electronic communications operator.

b. Lessee with an individual VAT registration number

500

When electronic communications services are provided for the benefit of a customer established in a French overseas department, the person liable for the tax remains the service provider when this customer does not have an individual VAT identification number, even if the services are supplied for purposes other than final consumption by the lessee.

2. Modalities of application of the reverse charge mechanism

510

The invoice relating to the operations concerned by the reverse charge will not mention the VAT payable.

However, it must clearly show that the VAT is due by the customer and bear the mention “reverse charge” pursuant to 13 of I of article 242 h A of annex II to the CGI , justifying the absence of collection of the tax by the supplier established in France.

520

When a service provider provides, in addition to electronic communications services subject to reverse charge, services for which it remains liable (e.g. rental of equipment), the rules of VAT specific to it.

530

Customers established and identified for VAT in France mention the amount, excluding taxes, of their purchases subject to reverse charge on the “other taxable transactions” line of their turnover declaration. The tax thus paid is deductible under the conditions of common law. Failure to declare by the customer is sanctioned by the fine provided for in 4 of article 1788 A of the CGI .

The service provider mentions symmetrically on the “other non-taxable operations” line of its turnover declaration the total amount, excluding taxes, of the operation.

Even if he does not collect the tax himself, the service provider can deduct the VAT he bears on his own expenses under the conditions of common law. This deduction may, depending on the case, take the form of a tax charge or a tax credit refund.

H. Construction work relating to real estate carried out by a subcontractor on behalf of a taxable lessee

531

In order to intensify the fight against fraud in the construction sector and to put an end to a distortion of competition to the detriment of subcontracting companies that respect their tax obligations, the 2 h of article 283 of the CGI establishes a system of reverse charge of VAT for construction work, including that of repair, cleaning, maintenance, transformation and demolition carried out in relation to real estate by a subcontracting company within the meaning of Article 1 of Law No. 75-1334 of December 31, 1975 relating to subcontracting on behalf of a taxable lessee.

The VAT relating to these operations is paid by the lessee.

1. Scope of the device

533

Subcontracting is understood, within the meaning of Article 1 of Law No. 75-1334 of December 31, 1975 , as “the operation by which a contractor entrusts through a subcontractor, and under his responsibility, to another person called subcontractor the execution of all or part of the business contract or part of the public contract concluded with the contracting authority”.

The reverse charge measure only applies to real estate work carried out by a subcontractor regardless of its rank in the event of chain subcontracting.

534

The works referred to are building construction works and other real estate works, including repair, cleaning, maintenance and repair works on buildings and installations of a real estate nature as defined in II-A § 20 et seq. BOI-VAT-CHAMP-10-10-40-30 . They include in particular:

  • building work carried out by the various trades involved in the construction or renovation of buildings;
  • public works and civil engineering works;
  • building equipment work, i.e. installation work comprising the implementation of elements which lose their movable character due to their incorporation into a building complex, which are considered, for the application of VAT, such as real estate works when they have the effect of incorporating the devices or pipes that are the subject of the installation into the real estate constructions;
  • repair or repair work having as its object the restoration of a building or an installation of a real estate nature. These are operations involving the use of materials or elements which form part of a real estate work or when the purpose of these operations is either to replace worn elements of a real estate installation, or to addition of new elements that are incorporated into this installation or the building that houses it.

For the installation, maintenance and renovation of stretch ceilings, please refer to BOI-RES-TVA-000037 .

For more details on the application of the VAT reverse charge mechanism provided for in 2 h of article 283 of the CGI to work carried out on a photovoltaic power plant when the latter is regarded as immovable property within the meaning of VAT, please should refer to BOI-RES-TVA-000077 .

Remarks: Cleaning operations which are an extension or ancillary to the work referred to above are subject to the same regime as this work. Only cleaning operations covered by a separate subcontract are excluded from the reverse charge mechanism.

When a company holding the contract or subcontracting calls upon another company for the manufacture of materials or specific works intended for the equipment of the building which is the subject of the work, this operation is not analyzed not as subcontracting but as an operation consisting of the delivery of tangible movable property and is therefore excluded from the reverse charge mechanism.

Intellectual services entrusted by construction companies to design offices, construction economists or engineering companies are excluded from the system.

The same applies to contracts for the rental of site machinery and equipment, including when this rental is accompanied by assembly and dismantling on the site.

2. Modalities of application of the reverse charge mechanism

535

These provisions apply to services provided under subcontracts signed as of January 1 , 2014. In the absence of a formal subcontract, any estimate, signed purchase order or other document making it possible to establish the agreement of will between the main contractor and its subcontractor for the performance of the subcontracted works and their price.

Are not concerned by the device the services provided in execution of purchase orders, amendments or exercise of option of conditional tranches after January 1 , 2014 relating to framework contracts or signed subcontracting contracts before this date. On the other hand, the services provided in execution of a subcontract prior to this date are within the scope of the system, when this contract has been the subject of a tacit renewal after this date and that these services are -same carried out after the date of the tacit renewal.

536

The invoice relating to the operations concerned by the reverse charge does not mention the VAT payable.

However, it must clearly show that the VAT is due by the taxable lessee (the principal) and bear the words “reverse charge”, pursuant to 13 of I of Article 242h A of Annex II to CGI , justifying the absence of tax collection by the subcontractor.

537

The lessee subject to VAT in France mentions the amount, excluding taxes, of the services provided to him and which are subject to reverse charge on the “other taxable transactions” line of his turnover declaration. The tax thus paid is deductible under the conditions of common law. Failure to declare by the principal is sanctioned by the fine provided for in 4 of article 1788 A of the CGI .

The subcontractor mentions symmetrically on the line “other non-taxable operations” of its declaration of turnover the total amount, excluding taxes, of the operation.

Even if he does not collect the tax himself, the subcontractor may deduct the VAT he bears on his own expenses under the conditions of common law. This deduction may, depending on the case, take the form of a tax charge or a tax credit refund.

538

In the case of direct payments to subcontractors by the contracting authority ( public procurement code [CCP], art. R. 2193-11 to CCP, art. R. 2193-16 ), delegation of payment or direct action ( law n° 75-1334 of December 31, 1975 relating to subcontracting, articles 12 and 14 ), the latter pays, in the name and on behalf of the main contractor (the principal), the subcontractor directly for the part of the contract which it performs. Therefore, the principal pays the sub-contractor on a tax-free basis and the main contractor reverse-charges the VAT.

Example: Consider a main company A holding a public contract of €100,000 excluding tax and corresponding VAT at the rate of 10% for an amount of €10,000 ; it subcontracts part of this contract to a company B accepted by the contracting authority for an amount of €40,000 excluding VAT (the corresponding VAT will be self-liquidated by the main company at the rate of 20% for an amount of 8 €000). As soon as the contracting authority has approved the payment conditions provided for in the subcontracting contract, he pays the subcontractor for the part of the contract which he is responsible for carrying out.

Subcontractor B performs all of its services during the month and sends its request for payment, under the conditions set out in article R. 2193-11 of the CCP in article R. 2193-16 of the CCP, accompanied by the invoice, which mentions the amount excluding tax of the subcontracting contract, i.e. €40,000 without showing the VAT payable; it bears the words “reverse charge” instead.

Main company A, for its part, also provided services during the same month. In total, the amount of the services carried out during this month is €60,000 excluding tax, i.e. €66,000 including all taxes (including tax), therefore including subcontracted work.

Main company A includes in its first monthly statement the amount of work carried out by the subcontractor (€40,000), the amount of work it has carried out itself (€20,000) and the amount of VAT payable on all services (€6,000).

The contracting authority pays €40,000 excluding tax to the subcontractor within thirty days of the payment agreement, express or tacit, from main company A. The latter must self-liquidate the VAT of its subcontractor. contractor B by entering the amount of €40,000 on the “other taxable transactions” line of his turnover declaration. At the same time, subcontractor B includes this same amount on the “other non-taxable transactions” line of its declaration.

The contracting authority pays the main company A, holder of the contract, the amount of the monthly statement, after deduction of the sums paid directly to the subcontractor, i.e. €26,000 including tax (€20,000 excluding tax for other services not subcontracted and VAT on all services provided during the month).

It is therefore €6,000 in VAT, on the basis of an amount of €66,000 including tax (VAT rate of 10%), that main company A declares and pays on its turnover declaration for the month in question.

During the performance of the contract, the main company A, holder of the contract, issues a second statement for the contracting authority for the other services it has provided, including the amount excluding tax of its services and the VAT at the rate of 10%, i.e. €44,000 including VAT (€40,000 excluding VAT and €4,000 VAT).

On completion of the works, the main company A draws up a draft final statement for the total amount of the sums to which it claims, minus the installments paid. It will therefore have invoiced the project owner €100,000 excluding tax (60,000 + 40,000) + €10,000 VAT at the rate of 10% (6,000 + 4,000 ) i.e. an amount including tax of €110,000, of which 40,000 € excluding tax will have been paid directly to the subcontractor by the contracting authority.

I. Receipt of Goods or Services Tax Free, Tax Suspended, or at a Reduced Rate

540

Pursuant to the provisions of Article 284 of the CGI , persons (natural or legal) who have been authorized to receive goods or services duty-free, with tax suspension under Article 277 A of the CGI , or under the benefit of a reduced rate of the said tax, are required to pay the tax, or the additional tax, when the conditions to which the granting of the tax exemption, the tax suspension or the rate reduced are not met.

550

This measure is likely to apply to anyone, whether or not subject to VAT (farmers, for example). It covers the various cases in which the granting of the exemption or suspension of VAT, or the benefit of a reduced rate, is subject to a destination or a particular use given by the buyer to the good or service. .

560

When the benefit of the duty-free purchase, the tax suspension or a reduced rate is subject to the delivery of a certificate by the buyer, article 284 of the CGI thus provides a legal basis for the commitment. stipulated on the said certificate and by which the buyer undertakes to personally pay the tax or the additional tax payable in the event that the conditions which justified the granting of the preferential treatment are not met.

570

With regard to duty-free sales and deliveries to exporters and business relating to certain metals and alloys, the provision in question merely superimposes measures of the same order resulting from Article 275 of the CGI .

580

With regard to transactions carried out under tax suspension in accordance with Article 277 A of the CGI, the recipient of the goods or the recipient of the services who issues the certificates is required to pay the tax when the goods do not receive the intended destination or when the service did not relate to goods which are placed or intended to be placed under a Community system or under a tax system.

Source: gouv.fr

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