What is a digital service for French VAT purposes?
EU VAT regulations (Directive 2006/112/EC, amended in 2015) introduced a precise definition of electronically supplied services. Services are considered digital when they meet two cumulative criteria: they are delivered via the internet or an electronic network, and their supply is largely automated with minimal human intervention.
This category includes: SaaS software and applications, website and data hosting, music and video streaming, online video games, e-books and online newspapers, non-interactive e-learning courses, online databases, and automated digital advertising services. Consultancy or training services delivered by a human presenter in real time are not digital services in the strict sense.
Place of supply rules: where is VAT due on digital services?
Since 1 January 2015, the rules on the place of supply of B2C digital services have been harmonised across the EU. VAT is due in the consumer's country, not in that of the provider:
- B2C (Business to Consumer): VAT is due at the rate of the country where the private customer is established. For a French customer, French VAT applies at 20% (or a reduced rate depending on the service).
- B2B (Business to Business): when the customer is a VAT-registered business, the reverse charge mechanism applies. The customer self-assesses the VAT in their own country. The foreign provider does not collect French VAT.
This B2B/B2C distinction is fundamental: a company that sells exclusively to French businesses generally does not need to register for French VAT for its digital services.
VAT obligations of foreign digital service providers
A foreign provider supplying digital services to French private individuals must collect and remit French VAT. Several options are available to meet this obligation:
| Provider's situation | Recommended mechanism | Tax representative? |
|---|---|---|
| Company established in the EU | OSS Union Scheme — return filed in country of establishment | Not required |
| Non-EU company — B2C digital services only | OSS Non-Union Scheme — registration in 1 member state | No (direct registration) |
| Non-EU company — digital services + other French transactions | OSS Non-Union + French VAT registration | Yes (for non-OSS flows) |
| Marketplace / digital platform | "Deemed supplier" rule — platform is liable | Depends on situation |
The VAT rates applicable to digital services in France in 2026 are as follows: 20% (standard rate), 5.5% (e-books, online press, certain cultural services), 2.1% (recognised news publications).
When does a tax representative become mandatory for a digital provider?
For purely B2C digital services, the OSS Non-Union Scheme makes it possible to avoid appointing a tax representative. However, a VAT tax representative in France becomes necessary in several situations common among digital businesses:
- The company has servers or physical infrastructure in France generating local VAT flows.
- It makes sales to French businesses subject to local invoicing (situations where reverse charge does not apply).
- It has a permanent establishment in France for tax purposes (office, local staff, etc.).
- It carries out physical imports linked to its digital activity (hardware, equipment).
- It wishes to recover French VAT on local purchases.
If your situation goes beyond the simple case of B2C services via the OSS, an accredited DGFiP tax representative can analyse your flows and secure your VAT compliance in France.