Key takeaways
- France extended the 5.5% reduced VAT rate to include COVID-19 protection products, animal feed, and agricultural goods until the end of 2023.
- Online marketplaces are now jointly liable for VAT on third-party sales to combat fraud and support fair ecommerce competition.
- Green tax incentives reduce VAT on electric vehicles and energy-efficient home improvements to promote sustainability.
In short: France made several VAT changes in 2023. The 5.5% reduced VAT rate for COVID-19 protection products was extended until December 31, 2023, and now also covers some animal feed and farm products. Online marketplaces became jointly liable for VAT on third-party sales. Green incentives also cut VAT on energy-saving work.
There have been several changes to VAT in France in 2023. Here are the key updates to the French VAT system:
How has France expanded its reduced VAT rate?
France has extended the 5.5% reduced VAT rate for COVID-19 protection materials and products until December 31, 2023. This covers masks, some hygiene products, and protective clothing.
The 5.5% reduced VAT rate will also apply to food for food-producing animals. It also covers products of agricultural origin, fish, fisheries, and poultry farming.
What is France's ecommerce VAT reform?
France has made online marketplaces jointly liable for VAT on sales by third-party sellers using their platforms, starting from 2023. This is a major reform of VAT rules for ecommerce, in line with European Union (EU) directives.
The French ecommerce VAT reform aims to tackle VAT fraud. It also aims to keep competition fair between ecommerce businesses.
What green tax incentives does France offer?
France offers green tax incentives through lower VAT on electric vehicles and energy-saving work. The country continues to put environmental sustainability first.
VAT in France on electric vehicles (EVs) has been reduced to encourage people to buy them, making EVs more affordable. The installation of energy-saving materials, such as thermal insulation and energy-efficient windows, is also subject to a reduced VAT rate of 5.5%.
What VAT rates apply in France today?
Mainland France has four VAT rates: 20%, 10%, 5.5% and 2.1%. According to the French Ministry of the Economy, they apply as follows:
- 20% (standard rate): most goods and services that have no specific rate.
- 10% (intermediate rate): passenger transport, accommodation, restaurant meals eaten on site, non-reimbursed medicines, cinema tickets, museums and zoos.
- 5.5% (reduced rate): food, feminine hygiene products, books, live performances and work that improves the energy performance of homes.
- 2.1% (particular rate): medicines reimbursed by social security, news publications, and first performances of certain shows.
Some 2023 positions no longer apply. Service-Public now lists protective masks at the 20% rate. Since 1 August 2025, gas and electricity subscriptions have also moved from 5.5% to 20%. Guadeloupe, Martinique and La Réunion use different rates.
When does a small business have to charge VAT in France?
A small business in France can stay outside VAT under the franchise en base scheme while its turnover stays under set limits. The limits are unchanged for 2026, according to Service-Public Entreprendre:
- Sales of goods and accommodation: €85,000 in the previous year, with a tolerance limit of €93,500 in the current year.
- Services: €37,500 in the previous year, with a tolerance limit of €41,250 in the current year.
If you pass the basic limit but stay under the tolerance limit, you lose the scheme from 1 January of the next year. If you pass the tolerance limit, VAT applies from the day you exceed it.
For example, a consultant who invoiced €36,000 in 2025 can use the scheme in 2026. If 2026 invoices pass €41,250 in October, VAT applies from that day.
What do these changes mean for businesses today?
The 2023 changes mainly affected sellers of reduced-rate goods, online marketplaces and businesses doing energy-saving work. Some of the rates above were time-limited. Before you apply a reduced rate, check that it still applies on the date of your sale.
The biggest change since 2023 is France's e-invoicing reform. It affects every business subject to VAT in France, not only ecommerce sellers. According to the French Ministry of the Economy, the key dates are:
- 1 September 2026: All businesses must be able to receive e-invoices. Large and mid-size businesses must issue e-invoices and send e-reporting data.
- 1 September 2027: Small and medium-sized businesses and micro-enterprises must issue e-invoices.
Our guide to e-invoicing in France explains what the reform means for your invoicing systems.
How Taxually handles this
Taxually’s CrossTax handles VAT registration, VAT, OSS and IOSS returns and fiscal representation in the countries you sell into, and checks your sales data against 250+ validation rules before each filing. OneTax then pays every tax authority with one bulk payment in your chosen currency.
Related guides
Frequently asked questions
What are the latest VAT changes in France for 2023?
In 2023, France extended the reduced 5.5% VAT rate for COVID-19 protective products and added new items such as animal feed and agricultural goods. The country also introduced VAT reforms for ecommerce, making online marketplaces jointly liable for VAT on third-party sales.
Are there any VAT incentives for green initiatives in France?
Yes. To support environmental sustainability, France applies a reduced 5.5% VAT rate on electric vehicles and energy-efficient home upgrades like insulation and double-glazed windows. These measures aim to promote eco-friendly choices among consumers and businesses.
When does e-invoicing become mandatory in France?
From 1 September 2026, all businesses must be able to receive e-invoices, and large and mid-size businesses must issue them. Small and medium-sized businesses and micro-enterprises must issue e-invoices from 1 September 2027.
What is the standard VAT rate in France?
The standard VAT rate in France is 20%. Reduced rates of 10%, 5.5% and 2.1% apply to specific goods and services, such as restaurant meals, food and reimbursed medicines.
Is the 5.5% VAT rate on masks still in force in France?
No. The extended 5.5% rate for COVID-19 protection products ran until 31 December 2023. Protective masks are now taxed at the standard 20% rate.
What is the VAT exemption threshold in France in 2026?
Under the franchise en base scheme, the limits are €85,000 for sales of goods and €37,500 for services, based on the previous year. Tolerance limits of €93,500 and €41,250 apply in the current year.
