VAT rates in France for 2023: all the changes to know about VAT for 2023
The promulgation of the 2023 Finance Act brings about a number of changes concerning the 2023 VAT rates in France. Applicable from January 1st, Eurofiscalis has prepared a complete guide on all the changes concerning VAT.
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Modification of the 2023 VAT rates in France on certain products
Expansion of the VAT rate to 5.5% in France
The introduction of a single VAT rate of 5.5% for agricultural and food products, both for animals and humans, will streamline the application of VAT in the agri-food and agricultural production sector.
This measure aims to address the cash flow problems that agricultural producers may face due to the differences in VAT rates between purchases of live animals (taxed at 10%) and sales of dead animals for human consumption (taxed at 5.5%).
As of January 1, 2023, the 5.5% rate is extended to the supply of:
- Foodstuffs intended for consumption by food-producing animals
- Products of agricultural, fishing, fish or poultry origin.
Eurofiscalis is an accounting and tax firm that handles your VAT registration and returns in the EU, UK, Switzerland and Norway
Which products are subject to a 5.5% VAT rate in France?
VAT rate 2023 on food products:
Most food products are subject to a 5.5% VAT rate except :
- alcoholic beverages
- chocolates
- confectionery
- vegetable fats, including margarines
Products and services for the disabled
They are also subject to the 5.5% rate:
- prostheses
- wheelchairs and other vehicles and equipment for the disabled (elevators, transport vehicles, etc.)
- electronic hearing aids
- orthopedic seats
- cardiac pacemakers
- devices for incontinent or diabetic people
- services for dependent and handicapped people: assistance for driving, administration, writing, etc.
VAT 2023 on gas and electricity subscriptions
Heat supply and gas and electricity subscriptions are eligible for the reduced VAT rate. This rate applies to electricity, gas and heat subscriptions that have been produced at least 50% from certain renewable energies such as geothermal or recovered energy.
VAT on energy equipment in 2023
Energy equipment that meets the performance criteria and energy characteristics retained for the tax credit for energy transition (CITE) are also eligible for the reduced VAT rate of 5.5%. This includes insulation materials, condensing boilers, as well as installation and maintenance services related to this equipment.
Work to improve the energy quality of a building is also eligible for the reduced VAT rate. Some examples of such work include: wall and attic insulation, installation of double-glazed windows or installation of energy-efficient heating systems.
Finally, the work resulting from the energy improvement work is also subject to the reduced VAT rate, provided that it is invoiced within a maximum of 3 months after the invoice for the energy improvement work.
VAT on energy equipment in 2023
Books, regardless of their medium, are also subject to the reduced VAT rate. This is due to the fact that books are considered intellectual works that do not have a strong advertising or commercial character.
Finally, various types of performances are subject to the reduced VAT rate, such as plays, concerts, operas, dances, ballets, magic shows, one-man shows, circus exhibitions, synchronized swimming exhibitions, boxing matches, sports competitions and soccer matches.
Extension of the 5.5% VAT rate on COVID-19 protective products and materials
During the COVID-19 crisis, the VAT rate on masks, protective clothing and certain hygiene products was lowered to 5.5%. This measure was to end in 2021. It was extended until December 2022. This measure has been extended again until December 31, 2023
Changes to VAT rates in the EU for 2023
During the COVID-19 crisis, the VAT rate on masks, protective clothing and certain hygiene products was lowered to 5.5%. This measure was to end in 2021. It was extended until December 2022. This measure has been extended again until December 31, 2023
Eurofiscalis is an accounting and tax firm that handles your VAT registration and returns in the EU, UK, Switzerland and Norway
Payability of value added tax on the supply of goods in 2023
From January 1, 2023, VAT becomes payable on the receipt of advance payments in proportion to the amount received. Promulgated by the law n° 2021-1900 of December 30, 2021 of finance for 2022, for any cashing of installment on the delivery of goods, the VAT on the amount of this installment will have to be declared and paid back.
We have published for you a complete article on the reform of the VAT payability on installments in 2023
Electronic invoices between VAT taxpayers and document retention
The widespread use of electronic invoicing in France has led to the updating of methods for securing electronic invoices, as well as the clarification of storage methods. Directive 2010/45/EU lists three examples of procedures or technologies that guarantee the authenticity of the origin, the integrity of the content and the legibility of electronic invoices, namely electronic signature, reliable audit trail and electronic data interchange. The eIDAS Regulation (910/2014) also provides for the use of the qualified electronic stamp, which benefits from a presumption of integrity and accuracy of data origin. Finally, Article 62 introduces this new method of securing invoices into the General Tax Code and takes into account the evolution of computer data storage means:
- the conservation of electronic documents on a computer medium, only when the documents are issued or received on a computer medium;
- the retention period for these documents will be the same as for paper documents.
These provisions will come into force as of the publication of the Finance Act for 2023 and will apply to documents and records drawn up as of that same date.
VAT control 2023: extension of the jurisdiction of tax officers
The jurisdiction of the judicial tax officers (OFJ) of the judicial investigation service of the Ministry of Finance (SEJF) is extended to VAT-related fraud and related offenses, as provided for in article 313-1 of the penal code. This extension is in line with recommendation n°6 of the Senate Finance Committee’s information mission aimed at combating fraud and tax evasion. Currently, only the judicial customs officers (ODJ) of the SEJF can be seized of these cases, whereas the management of VAT recovery has been transferred from the DGDDI to the DGFiP. This evolution will allow the SEJF and the magistrates to have the specific competences of the FOJ to fight against VAT frauds.
Eurofiscalis has a team of experts in intra-community VAT and indirect taxes in the EU. We can carry out a VAT audit to verify your compliance.
Companies under the VAT exemption scheme: the new features concerning your INTRASTAT and EC Sales List
Companies benefiting from the basic exemption of VAT are no longer required to submit VAT recapitulative statements for intra-Community supplies of goods that they make. However, they still have to fill in European service declarations (ESD) for sales of services to taxable customers located in other EU countries. These declarations can be filed in paper format.
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