French input VAT 2022: deduction’s limitation until 31/12/2024

The Article 208 of Annex 2 of the French General Tax Code allows taxable persons to deduct the French input VAT not declared in a due course within the limitation period of 2 years from the end of the calendar year of the incurred expense.

Thus, the French VAT on purchases and travel expenses from 2022 can be deducted, according to the rules of common law, in the last VAT declaration of the current year, i.e. in the VAT declaration for the month of November, due in December 2024.

The deductible VAT amount omitted in previous tax periods must be reported in box 21 of the monthly VAT declaration CA3.

This amount may include:

VAT deductible on supplier invoices

• Fixed costs
• Assets
• Production costs

VAT deductible on Travel & Expenses

• Fuel
• Tolls
• Parking
• Accommodation for third parties
• Restaurant
• Entrance fees to events taking place in France
• Gifts up to €73 including tax
• Representation expenses
• Rental of meeting rooms
• Office supplies and similar expenses

Conditions of input VAT deduction

For deducting the input VAT on their business expenses (excluding non-deductible expenses of point IV, Article 206 of Annex II to the French General Tax Code), the VAT registered companies must meet several conditions:

• possession of a compliant original invoice
• proof of an effective transaction subject to the French VAT
• allocation of incurred expenses to non-exempt transactions or to exempt transactions with the right of VAT deduction

Compliance of invoices: The invoices are considered compliant if they contain all the mandatory mentions stipulated in the French General Tax Code, with certain exceptions for low-value invoices below €150 excluding VAT (articles 289 of the CGI and 242 nonies A of Annex II to the French General Tax Code). The French e-invoicing reform coming into force on 01/09/2026 introduces 4 additional mandatory elements: customer’s SIREN-number, type of transaction, option for VAT on debits for supplies of services, delivery address for supplies of goods.

Regularity of VAT applied: The French VAT can only be deducted when the invoiced transaction is taxable in France and when it’s charged with the applicable legal rate which is due by the supplier. This means in practice that the French VAT applied by mistake on transactions not taxable in France, or subject to a lower VAT rate, or due by the recipient, does not give rise to the deduction right. It is therefore important to check the regularity of the VAT invoiced by the supplier in order to request the related invoice correction and the VAT refund from the latter.

Allocation of expenses: Finally, expenses incurred for purposes not directly connected with the company’s commercial activity, as well as those incurred for exempt transactions without deduction right, cannot be taken into consideration for the assessment of the deductible VAT. Partially liable or partially exempted taxpayers can deduct the input VAT in proportion to their transactions falling within the scope of VAT and giving rise to the VAT deduction’s right . The creation of separate sectors of activity with the precise allocation of the incurred expenses is necessary for justifying the deductions made without pro rata rate.

Our VAT support

For securing and optimising input VAT deductions in France, BtoBnice is providing to businesses:

• operational support in assessment of deductible VAT amounts
• VAT training sessions for accounting teams

For any additional information and quote requests, we invite you to contact our VAT expert: contact@btobnice.com