Leaving your Money on the French VAT Table

The tourism industry is huge, contributing upwards of 10 trillion U.S. dollars to the global economy. Travelling for business is a huge chunk of this amount, accounting for as much as 1.3 trillion dollars of the total.

Global business travel spending growth forecast from 2015 to 2020

Source: Statista

In this post, we are going to discuss reclaiming VAT in France. It’s different if you are an EU-based company or one out of the EU.

If you run a company that can have as few as 2 but as many as 50 salesmen and executives travelling on business at any point, and you do not have a clear way of recovering VAT or have tried and failed then this post is for you.

France is part of Western Europe and is well known for its cheese, wine, iconic sporting events like the Tour De’ France, museums, fashion and fine cuisine. Paris is the capital of France, which has the fifth most developed economy in the world and is one of the five permanent members on the US security council. It’s a leading member state of the EU and the Eurozone.

In 2002, France introduced the Euro as its currency.

The French VAT rates are as follows:
  • Standard Rate 20%
  • Reduced Rates 10%, 5.5% and 2.1%
  • The reduced rate of 10% is for books, local public transportation, hotel stays and restaurant meals; the rate of 5.5% is for most groceries.
As a member of the EU, France is required to comply with VAT directives,

Here are some handy phrases to remember whenever making a business related purchase. When in doubt ask:

English
Please give me:

  • An original VAT invoice
  • With my company name and address
  • VAT rate and value shown

France
S’il te plait donne moi:

  • Une facture Originale pour TVA
  • La raison sociale et láddresse
  • Taux de TVA et valeur facturée

As a company, you may have as few as one or as many as 20, 30 or more executives and salesman traveling on business. Think of all the expenses they incur for communication, travel, lodging, and food. Think of all the different situations where they purchase goods and/or services that are recoverable.

However, a number that stands out is the 20 Billion euros per year of VAT that is not recovered by companies. This is due to archaic mostly manual procedures, language barriers, a lack of knowledge of the tax technicalities themselves, the ability to reach administrations and many others reasons.

The rules are always changing. For example, in France, beginning in 2018, 20% of VAT on fuel expenses can be reclaimed by companies.

Technology is empowering many business travelers to book their own hotels, make airline and restaurant reservations, as well as purchase their own business-related products and services. This technology is also available to make the recovery of VAT approved expenses simple.

A highly informative survey was put out by Egencia, the research arm of Expedia online travel, around this time last year. The report highlighted a rapidly rising trend that business travelers wanted mobile technology access integrated into all their devices to maximize their productivity on the road. To stay productive wherever they are, business travelers need to be able to manage their bookings from every device.

You can read the survey here: Not a Second to Waste – Business Travellers Expect to Manage Travel on All Devices

The time has come to use mobile technology to facilitate the recovery of business-related redeemable VAT expenses. This will not only increase a company’s bottom line, but streamline the process as well. Utilizing mobile technology, business travelers can manage their VAT expenses on their business travel.

By companies simplifying their VAT reclaim processes, they can minimize the confusion and noise that come along with the VAT reclaim territory. You’ll be empowered to provide greater control and reporting that is both easily understood and transparent.

For the complete story on recovering VAT in France and other EU countries, download our eBook.