VAT Rates, Daily and Mileage Allowances and E-archiving in France

VAT rates in France

France imposes Value Added Tax (VAT) at different rates as follows for various goods and services:

1. Standard rate - 20%

The standard VAT rate in France is applicable to all taxable goods and services, except when a specific measure allows for a reduced rate.

2. Reduced rate - 10%

Some foodstuffs, certain non-alcoholic beverages, domestic passenger transport, intra-community and international road (some exceptions) and inland waterways transport, admission to some cultural services; hotel accommodation, restaurants (excluding alcoholic beverages).

3. Reduced rate - 5.5%

Some foodstuffs, some non-alcoholic beverages, water supplies, books, some e-books, admission to certain cultural events, admission to sports events.

4. Reduced rate - 2.1%

Some pharmaceutical products, some newspapers and periodicals, license fees, admission to certain cultural events.

5. Zero rate - 0%

Intra-community and international transport (excluding road and inland waterways).

Since January 1, 2022, VAT on gasoline and diesel is fully aligned and deductible as follows:

• 80% deductible for passenger vehicles (referenced M1: see letter J on the French vehicle registration card);
• 100% deductible for commercial vehicles (referenced N1: see letter J on the French registration card).

Source: ​https://bofip.impots.gouv.fr/bofip/1194-PGP.html/identifiant%3DBOI-TVA-DED-30-30-40-20170405https://www.economie.gouv.fr/cedef/taux-tva-france-et-union-europeenne

Daily allowances in France

Domestic Per Diem

Per diem allowances are designed to cover meals and accommodation during business trips.

Source: https://www.urssaf.fr/accueil/outils-documentation/taux-baremes/frais-professionnels.html#FilAriane

https://www.urssaf.fr/accueil/outils-documentation/taux-baremes/frais-professionnels.html#FilAriane 

The tax-free per diem allowance will automatically be decreased:

• By 15% starting from the 4th month.
• By 30% starting from the 25th month within the limit of 4 years

Foreign daily allowance

For all travel abroad and overseas, a fixed daily mission allowance can be paid for each 24-hour period spent (between 0 a.m. and 11:59 p.m.) at the place of the mission, intended to cover the expenses of accommodation (room, breakfast and any tourist tax) and meals.

The lump sum allowances employees are paid to cover their business travel expenses abroad must be deducted as follows:

• 65% for lodging and breakfast
• 17.5% for lunch or dinner
• 35% when if employee is fed at both lunch and dinner

The tax free per diem allowance will automatically be decreased:

• By 15% starting from the 4th month.
• By 30% starting from the 25th month within the limit of 4 years

Source: https://www.legifrance.gouv.fr/loda/article_lc/LEGIARTI000045705554 https://www.legifrance.gouv.fr/loda/article_lc/LEGIARTI000038194851/2023-08-08 

Mileage allowances in France

Employees travelling for business with their private vehicle may be entitled to a tax-free milage allowance, the conditions of which are as follows:

• standard rate applies if the car has driven less than 5.000km per year
• lower rate applies for mileages between 5.000km and 20.000km per year
• lowest rate applies if the car has driven more than 20.000km per year

The mileage rates applied differ differ depending on the car’s power. For electric vehicles, the amount is calculated based on the below rates increased by 20%.

Source: https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000041672800/2023-04-11/

https://www.impots.gouv.fr/sites/default/files/media/3_Documentation/depliants/nid_4002_gp_120.pdf

Electronic archiving and retention period in France

The documents or supporting documents necessary for the establishment of the basis of assessment or for the control of social security contributions must be kept for a period of at least six years from the date on which the documents or documents were drawn up or received.

When documents or exhibits are drawn up or received on paper, they may be kept on a computer medium. The procedures for digitising documents drawn up or received on paper are set by order of the Minister responsible for social security.

Book of tax procedures, Section A102 B-2

I. – The transfer of invoices originally drawn up on paper to a computer medium is carried out under conditions guaranteeing their identical reproduction. The result of this digitization is the copy conforming to the original in image and content. The colors are reproduced identically if a color code is implemented. Image processing devices are prohibited. If file compression is used, it must be lossless.

II. – Digital archiving can be carried out by the taxable person or by a third party mandated for this purpose. The digital archiving operations of invoices originally drawn up on paper are defined according to a documented organization, subject to internal controls, ensuring the availability, readability and integrity of the invoices thus digitized throughout the duration of conservation.

III. – In order to guarantee the integrity of the files resulting from the digitization, each digitized document is kept in PDF format (Portable Document Format) or in PDF A/3 format (ISO 19005-3) in order to guarantee the interoperability of systems and the sustainability of data and is accompanied by:

1° A server stamp based on a certificate that complies with at least the one-star level general security reference system (RGS).
2° A digital fingerprint.
3° An electronic signature based on a certificate that complies, at least, with the general security reference system (RGS) at one-star level.
4° Or any equivalent secure device based on a certificate issued by a certification authority appearing on the French trusted list (Trust-service Status List-TSL).
Each file is timestamped, at least by means of an internal timestamping source, in order to date the various operations carried out

Source: https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000037853712/ 

https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000034311685