VAT Regularisation in France: Administrative Clarifications

The French tax administration has recently updated the BOFiP (Bulletin Officiel des Finances Publiques) comments regarding the timeframes for suppliers to rectify invoices in the event of VAT errors identified by the recipient.

This correction and declarative regularisation period remains set at two years, but it starts from the date the error is detected.

This clarification is particularly important due to the discrepancy between the three-year period during which the French tax administration can reassess VAT for the recipient and the two-year period granted to the supplier to make corrections.

To ensure VAT neutrality for taxable persons, the French tax administration thereby eliminates the risk of VAT losses mistakenly borne by the recipient. If the tax administration rejects undue VAT due to its non-deductibility, the VAT can be recovered from the supplier, who will have an additional two years to correct the error, provided they are still in business.

Although European and national case law, along with associated administrative measures, prioritise the principle of substance over form, taxable persons must ensure the correct VAT rates are applied on both sales invoices and purchase invoices.

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