Would you like to enter the French market but prefer not to establish a company in France? Do you have questions about French taxes, particularly VAT? We will answer one of the most common concerns of foreign companies operating in France: Does a foreign company need a VAT number?
What is a VAT Number?
A VAT identification number is a unique tax identifier assigned to businesses subject to Value Added Tax (VAT) in an EU country. It facilitates commercial transactions between companies within the EU and ensures the proper declaration and payment of VAT. It begins with the country code (FR for France, DE for Germany, etc.), followed by a series of numbers or letters unique to each country.
Do foreign companies need to obtain a VAT number if they do not have an establishment in France?
Yes, in some cases, a foreign company without an establishment in France may be required to have a VAT number. A VAT number is mandatory for the following situations:
- Intra-community acquisitions made in France;
- Intra-community deliveries considered stock transfers;
- Invoicing VAT-taxable transactions in France to individuals or non-VAT-registered entities;
- Intra-community deliveries from France;
- Exports from France;
- Distance sales of goods from another state to individuals in France;
- Self-assessment of VAT on imports;
- Self-assessment of VAT on purchases of goods or services from a supplier not established in France;
- Self-assessment of VAT on subcontracting;
- Leasing of bare commercial property.
For more information, please refer to the official tax website « Do foreign companies have to register for VAT? » or contact the French tax authorities.
How to obtain a VAT number?
To receive an intra-community VAT number, you must apply to the Service des Impôts des Entreprises (SIEE) and may need to appoint a tax representative. If you are not liable for withholding tax on employees in France and are based in a non-EU country (except for some specifically designated third countries), you must apply via https://formalites.entreprises.gouv.fr/. For further details, please contact the Service des Impôts des Entreprises (SIEE).
Why choose the ESEF status?
The Enterprise Without Establishment in France (ESEF) status allows foreign businesses to enter the French market and hire employees without creating a legal entity in France. While this status does not always exempt from intra-community VAT, it provides several benefits:
- Reduced formalities: Since no legal entity needs to be registered in France, foreign companies avoid numerous administrative procedures.
- Limited risks to test a new market: Not having an establishment in France allows companies to test the market quickly without committing significant time or financial resources.
- Easily achieved cost savings: By avoiding excessive paperwork and paying only minimal taxes (social contributions), a foreign company with ESEF status can achieve significant annual savings.
If you want to start your business in France without creating a company and take full advantage of the ESEF status, do not hesitate to contact us to discuss your project!
