VAT: finally understand the basics!

What is it? 🤔


Intracommunity VAT (Value Added Tax) is an individual identification number assigned to companies subject to VAT and domiciled within the European Union.

All companies trading goods and/or services with other companies in the European Union must have this number.

This is obtained when the company registers or declares its activity with the Center de Formalités des Entreprises (CFE). It is issued free of charge by the Service des Impôts des Entreprises (SIE) after obtaining your SIREN number.

📣 Some businesses may not be subject to VAT, such as those subject to the basic VAT exemption scheme.


What's it for? 💡


It facilitates and guarantees trade between companies in the European Union 🤝 and concerns all transactions involving the purchase and sale of goods and/or services.

Its number must appear on :

  • Company invoices
  • Declarations of trade in goods and services
  • VAT returns


What types of operation are involved? 📌


Intra-Community VAT applies to ✌️ types of operation:

  • The arrival of goods on French territory, which is subject to French VAT and must be paid by the purchaser of the good or service. Note that it is possible to deduct this VAT under certain conditions.
  • The shipment of goods from France to a European Union country, which is a priori subject to French VAT but may be exempt if the following conditions are met:

    • both seller and buyer are subject to VAT
    • the transaction is not free
    • you know the buyer's VAT number
    • you have proof of goods transport

Important to know 💡 : for exchanges of services, the seller invoices exclusive of tax and the customer is therefore responsible for paying the VAT to the tax authorities. This is known as the reverse charge system.


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