French VAT Guidelines on Company Cars: New Ruling and Implications for Employers and Employees

• French tax authorities clarified VAT rules for company cars provided to employees.
• Provision of vehicles for professional or private use is subject to VAT if any form of consideration is identified.
• The ruling aligns with the CJEU QM judgment and clarifies the situation in France.
• Employer-provided vehicles are considered a supply of services for consideration if payment is involved.
• Any form of consideration, even implicit, makes the provision subject to VAT.
• New approach allows VAT deduction on vehicle purchases or leases under certain conditions.
• Taxable basis is determined by rent amount or salary portion waived by the employee.
• VAT must be collected and reported by French companies for employees residing in France.
• In cross-border contexts, VAT is due in the employee’s residing EU Member State.
• VAT deduction is possible for taxable rentals, offering an opportunity for companies.
• Grey areas remain regarding benefit in kind on payslips and URSSAF regime monitoring.
• Further clarifications are expected from French Tax Authorities on financial implications.

Source: taxand.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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