Case
Your company based in Poland has signed a contract for the erection of an industrial warehouse in France. Your workers will be temporarily dispatched on the worksite.
Construction services are subject to VAT in the country where the immovable property is located
Construction services are subject to VAT in the country where the immovable property is located (art. 47 of VAT Directive).
French VAT is therefore applicable. However, a local reverse charge (payment of VAT switched to the client) has been implemented into the French VAT Act enabling you to avoid any VAT registration in France provided your client is VAT registered in France. Your company is therefore not required to be VAT registered in France and must issue invoice without charging any VAT. French VAT incurred on your expenses can be refunded through the electronic procedure available in your own country.
Pay attention to
Companies acting in the construction sector must pay attention to the following issues in France:
- VAT registration is required in case your company purchase materials for the construction from another country and the goods are shipped on the worksite in France;
- Check the VAT treatment of your relationships with French subcontractors. French VAT Act implemented a special reverse charge in some situations.
- Check the VAT rate applicable on the transaction. French VAT ACT implemented a reduced VAT rate in the construction sector.