VAT-related mistakes
French VAT is the area where non-residents make the most mistakes, often through unfamiliarity with reporting obligations or the mistaken belief that they are exempt.
Mistake 1 — Failing to register when the obligation exists. Any non-EU company carrying out taxable transactions in France (selling goods, providing services, storing goods) must register for French VAT and appoint a tax representative. Exceeding a threshold or simply completing a first taxable transaction is enough to trigger this obligation.
Mistake 2 — Confusing the OSS with the VAT tax representative. The One-Stop Shop (OSS) simplifies declarations for B2C intra-EU sales, but does not replace the tax representative for transactions outside the OSS scope: intra-EU acquisitions, storage in France, local transactions.
Mistake 3 — Failing to declare intra-EU acquisitions. A non-EU company that purchases goods from European suppliers with delivery in France must declare these acquisitions. Systematic omissions are often detected through VIES data cross-referencing.
Mistake 4 — Not reclaiming VAT on French purchases. Paradoxically, many foreign companies forget to apply for reimbursement of VAT paid on their purchases in France. This credit, sometimes significant, becomes time-barred and is permanently lost if the claim is not filed in time.
Mistakes in property matters
For non-residents who own property in France, other specific mistakes are common.
Mistake 5 — Selling a property without appointing an accredited tax representative. When the net capital gain exceeds €150,000, appointing a DGFiP-accredited tax representative is mandatory for the notary to proceed with the sale. Without a representative, the transaction is simply blocked.
Mistake 6 — Miscalculating the capital gain. Non-residents benefit from length-of-ownership allowances and certain conditional exemptions. Failing to apply them leads to overpaying tax; conversely, failing to justify them correctly exposes you to a reassessment.
Mistake 7 — Overlooking social levies. In addition to capital gains tax (19%), social levies of between 7.5% and 17.2% apply depending on the situation. Residents of non-EEA countries not covered by an administrative assistance agreement are subject to the full rate of 17.2%.
Procedural and organisational mistakes
Beyond technical errors, organisational failures can also have serious consequences.
Mistake 8 — Not responding to DGFiP correspondence within the deadlines. Notifications are sent to the tax representative or to the last known address. Without regular monitoring, response deadlines (30 to 60 days) can expire without any reaction. The administration then proceeds with automatic adjustments carrying 40% surcharges.
Mistake 9 — Changing tax representative without notifying the DGFiP. The appointment of a new tax representative must be formally notified to the tax office. During the transition period, correspondence continues to be addressed to the former representative, with the risk that an audit notice is never received.
Mistake 10 — Assuming that inactivity removes reporting obligations. Even in the absence of transactions for a period, reporting obligations may remain (nil returns, maintenance of VAT registration). Failing to file these returns generates late-filing penalties.
Practical consequences and solutions
These ten mistakes share one common trait: they are all avoidable with proper support. The consequences, however, can be severe.
- VAT reassessments covering several years within the limitation period (3 years as a rule, 6 years in cases of fraud)
- Surcharges of 10% to 80% depending on the nature of the breach
- Late interest of 0.20% per month
- Blocked property transactions
- Forced recovery procedures through international assistance agreements
To avoid these mistakes, consult our list of DGFiP-accredited tax representatives. These professionals know precisely the obligations that apply to your situation and actively monitor your files.