- Invoices issued by suppliers of goods or service providers are commonly used for transferring the right to deduct VAT
- According to French tax law, every taxable person must issue an invoice for goods delivered or services provided to another taxable person or a non-taxable legal entity, as well as for advance payments received for these transactions
- The invoice must clearly list the identification of the parties, the goods delivered or services provided, the date of the transaction, the total amount excluding tax by tax rate, and the corresponding VAT
- The right to deduct VAT can only be exercised if the tax is mentioned on an invoice
- Example given is a furniture manufacturer selling office furniture to another taxable entity must issue an invoice showing the total amount excluding tax and the corresponding VAT
- If the furniture is used for operations that qualify for VAT deduction, the buyer can deduct the VAT as per common law conditions once they possess the invoice, provided the tax liability has occurred
- Transmission of goods for free is treated as a normal delivery, allowing the taxable person transferring the goods to issue an invoice showing the tax paid on the self-delivery
- The recipient of the free goods can deduct this tax if the substantive conditions for exercising the right to deduction are met
- Only invoices that have been properly issued to the company by its suppliers of goods or services, either directly or through an agent, can justify the deduction
- Exceptions are provided for traders who cannot issue invoices at each sale, transactions of low-value goods or services, buyers in certain professions under certain conditions who are authorized to issue invoices on behalf of their suppliers, and taxable persons conducting operations in France or deemed so and exempt from VAT
Source: bofip.impots.gouv.fr
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.
