DISCLAIMER: Please note, this is not a legally approved document. We are outlining what our customers doing in France when it comes to the statutory requirements. They may be using Mews to achieve some of it and some third-party services to get to some of the remaining requirements.
1. What are the VAT levels in France?
- The normal rate of VAT is fixed at 20 % (art. 278 du code général des impôts), for the majority of sales of produce and services. This applies to all products or services for which no tax percentile has been specifically planned.
- The reduced rate of 10 % (art. 278 bis, 278 quater, 278 sexies A, 278 septies et art. 279 du CGI) is particularly applicable to unprocessed agricultural products, firewood, housing improvement work which does not benefit from the 5.5% rate, certain accommodation and camping services, fairs and shows, games and rides fairgrounds, entrance fees to museums, zoo, monuments, passenger transport, waste treatment, catering.
- The reduced rate of 5,5 % (art. 278-0 bis, 278-0 bis A, art. 278 sexies du CGI) mainly concerns food products, feminine hygiene protection products, equipment and services for the disabled, books in any medium, gas and electricity subscriptions, supply of heat from renewable energies, supply of meals in school canteens, ticketing for live performance and cinema, certain imports and deliveries of works of art, work to improve the energy quality of housing, social or emergency housing, home ownership.
- The special rate of 2,1 % (art. 281 quater et suivants du CGI) is reserved for drugs reimbursable by social security, sales of live animals for slaughter and delicatessen to non-taxable persons, television license fees, certain shows and press publications registered with the Joint Committee for Publications and Press Agencies .
- The special rates applicable in Corsica are set at l'article 297 of the General Code of Taxation (CGI)
- The specific rates applicable to the overseas departments are set at articles 294 et suivants of the General Code of Taxation (CGI). VAT rate instead of 20% goes to 8,5 % in Guadeloupe, Martinique, Réunion
2. What type products should each VAT level apply?
3. Is there upcoming change of VAT levels?
This is not expected to happen in the tertiary sector (hospitality)
4. Should deposits be used for VAT payments (in case of advance deposit payments) or not (or both are allowed)
The Different types of Deposits
- The L'Acompte (deposit) is a first payment on the purchase of goods or services. It implies an obligation for the seller to supply the goods or the provision of services and a purchase obligation for the consumer, unless otherwise agreed between the parties. The 2 parties are committed and can be ordered to pay damages if one or the other retracts.
- The Arrhes (deposit) is a sum paid in advance for the purchase of goods or services. The deposit does not force the consumer to buy. On the other hand, they are lost if the consumer cancels his purchase unless the contract provides for the possibility of recovering the deposit in the event of cancellation. The seller who does not supply the goods or the provision of services may be ordered to reimburse double the deposit paid.
Note: the sums paid in advance on the occasion of any sales contract are a deposit once the contract is entered into between a professional and a consumer, unless otherwise provided in the contract.
- L'Avoir (Credit) is equal to the value of a commodity you returned. It is issued by the seller, on a commercial basis, to allow a subsequent purchase. If the seller is at fault (for example, late delivery, article returned following a defect), the consumer is not obliged to accept this arrangement.
Invoices issued before the event giving rise to the sale of goods or services are considered as down payments.
In the case of the delivery of a good, a deposit invoice does not trigger the liability of VAT, because the operative event is the delivery of the good. VAT should therefore not appear on the down payment invoice.
A sale of a property is concluded on April 1. Its value is 100 €. Delivery is scheduled for April 15. A deposit of € 30 is due upon conclusion of the sale of the property.
Invoice of April 1: 30 € are invoiced to the customer, no VAT is collected.
Invoice of April 15: 70 € are invoiced to the customer, VAT becomes payable and its amount relative to the total price of the sale appears on the invoice.
Conversely, a service deposit invoice always results in the VAT being payable for the supplier.
When services are provided continuously over a period of more than 1 year without instalment payments, VAT is payable at the end of each calendar year throughout the duration of the service.
5. What City taxes apply in your country?
6. How is City Tax calculated?
The rate retained by the municipality for one of the accommodation categories may not exceed the rate retained for a higher category of the same nature.
The rate limits mentioned in the table above are, from the year following that for which they apply for the first time, revalued each year in a proportion equal to the rate of growth of the price index consumption, excluding tobacco, for the penultimate year. When the tariff limits thus obtained are expressed by numbers with more than one digit after the decimal point, they are rounded to the tenth of a euro, euro fractions less than € 0.05 being neglected and those equal to or greater than 0,05 € being counted as 0.1 €.
When, due to this revaluation, the rate adopted by a local authority no longer corresponds to one of the values mentioned in the table above, the rate applicable for the year of revaluation of the scale is that mentioned in the same array whose value is immediately lower or immediately higher than that resulting from this deliberation.
For all accommodation awaiting classification or without classification with the exception of the accommodation categories mentioned in the table above of this article, the applicable rate per person and per night is between 1% and 5% of the cost per person per night within the limit of the highest rate adopted by the community or, if it is lower than the latter, the ceiling rate applicable to 4-star tourist hotels. The cost of the night corresponds to the price of the accommodation service excluding tax.
A Council of State decree determines the content and sets the date of publication of the information which must be made available to the persons responsible for collecting the tax, in order to enable them to determine the tariff applicable in the territory of the municipalities and public inter-municipal cooperation establishments that have instituted the tourist tax.
In accordance with III of article 113 of law n ° 2019-1479 of December 28, 2019, from January 1, 2020, the rate applicable to collective hostels is that adopted by the local authority for the category of 1-star tourist hotels, 1-star tourist residences, 1-star tourist accommodation, 1, 2 and 3-star holiday villages and guest rooms.
Taxation of Collective Hostels
Article 113 of the finance law for 2020 integrated collective hostels in the price lists provided for in articles L. 2333-30 and L. 2333-41 of the CGCT. Article L. 312-1 of the Tourism Code defines a collective hostel as a commercial accommodation establishment that offers day beds in shared rooms as well as in individual rooms to people who do not choose to live there. Whether they pursue a gainful activity or not. It is operated, by a natural or legal person, on a permanent or seasonal basis. It has collective spaces, including at least one catering area. The bathrooms are shared or private in the bedrooms. It can include one or more collective buildings
In practice, this definition is intended to include youth hostels, international accommodation centres, lodges for groups and hostels.
As of January 1, 2020, the rate applicable to collective hostels is the one adopted by the local authority for the category of tourist hotels 1 star, 1 star tourist residences, 1 star tourist accommodation, holiday villages, 1, 2 and 3 stars and guest rooms (price between 0.20 € and 0.80 €)
Tax Regime applicable to accommodation awaiting classification or without classification
When instituting the tourist tax, the municipalities and groups of municipalities must choose the tax regime applicable for each type of accommodation provided for by the general code of local authorities. However, accommodation awaiting classification or without classification has been, since January 1, 2019, taxed in proportion to the cost per person of the night. It was difficult, if not sometimes impossible, to determine the amount of tourist tax owed by the landlord when the fixed rate regime applied. This is why article 112 of the 2020 finance law now provides that accommodation awaiting classification or without classification is systematically taxed according to the so-called "real" tax regime.
This change, which entered into force on January 1, 2020, does not require new deliberations on the part of the communities. The collection periods and rates applicable in 2020 are those previously adopted. If the hosts had already paid, before the promulgation of the finance law for 2020, an amount of lump sum tourist tax corresponding to a period including a date after January 1, 2020, the change of tax regime applies for the next collection period.
Pending a new deliberation by the municipality or the EPCI providing for the payment schedule for the collected tourist tax, the hosts will return the sums at the end of the collection period.
How is the additional tax added to the departmental tourist taxes?
After establishment by deliberation of the departmental council taken before October 1 for application from January 1 of the following year, the additional departmental tax equal to 10% is added to the time collected by the municipalities and the EPCI. The product collected is then paid by the municipality or the group to the department at the end of the collection period. As with the tourist tax, the proceeds of the additional tax are allocated to expenditure intended to promote the tourism development of the department.
Since January 1, 2019, unclassified accommodation will be taxed in proportion to the cost of the night. The additional tax of 10% is added to the rounded rate obtained after application of the rate adopted by the community.
For example, a night for one person in non-classified accommodation costs € 100, the municipality has adopted the rate of 3% and € 4 for the highest rate. The tourist tax is € 2.30 per night (application of the ceiling).
The amount of the additional tax is then 0.23 €, the person will have to pay a total amount of tourist tax of 2.53 €.
As an exceptional disposition to face the consequences of the health crisis (COVID-19)
An article of the third amending finance bill for 2020 offers the possibility for municipalities and EPCIs which have instituted a tourist tax or a flat-rate tourist tax to completely exempt the parties for 2020, by a deliberation taken between June 10 and July 31, 2020.
When adopted the exemption applies systematically to:
- All types or categories of accommodation for payment offered in the territory concerned:
- For amounts due for the whole of 2020 (flat-rate scheme)
- For overnight stays from a date set in the PLFR3 (actual regime):
- To the additional taxes provided for in Articles L. 3333-1 and L. 2531-17 of the CGCT
- The sums paid for the exempt period are subject to a refund upon presentation by the person liable for a request to the municipality or to the EPCI (flat-rate scheme) or to the professional responsible for collecting the tourist tax (real regime)
- Those liable for the flat-rate tourist tax are exempt from the declaration provided for in article L. 2333-43 of the CGCT
The administration will publish the information relating to the decisions taken by the communities and relating to the tourist tax due for 2020.
The elements of this measure are set out subject to any possible changes resulting from parliamentary debates relating to the PLFR 3.
The dates will be specified in an article posted on the site: https://www.collectivites-locales.gouv.fr/
7. What regions and type of properties do they apply to?
Who can institute the tourist tax?
The following may institute the tourist tax (cf. article L. 2333-26 of the CGCT):
- Tourist municipalities
- Classified tourist resorts
- Coastal municipalities
- Mountain municipalities
- The municipalities which carry out promotion actions in favour of tourism as well as those which carry out actions to protect and manage their natural space.
The EPCIs, whatever their tax regime, can institute, like the municipalities, the inter-municipal tourist tax by deliberation of their deliberative body. It is thus applied throughout the Community territory and constitutes a tool for harmonizing tourism policy on the scale of the grouped territory. The departments can also institute, by a deliberation taken before October 1 for entry into force on January 1 of the following year, an additional tax of 10% to the tourist tax collected by the municipalities or the EPCI (cf. article L . 3333-1 of the CGCT).
In addition, an additional tax to the tourist tax is automatically applicable in the Île-de-France region since January 1, 2019. This additional tax of 15% is levied only on the territory of the municipalities and EPCIs that have instituted the tourist tax. Its proceeds are donated to the public establishment "Société du Grand Paris". The proceeds thus collected will participate in the financing of the Grand Paris Express (cf. article L. 2531-17 of the CGCT).
8. Are there any current requirements?
The NF525 Certification
French Fiscalisation Legislation : https://bofip.impots.gouv.fr/bofip/10691-PGP.html/identifiant=BOI-TVA-DECLA-30-10-30-20180704
9. Are there any tourism reports required?
Individual police record for a foreign tourist
Anyone who leases tourist accommodation (whether professionally or not) to a client of foreign nationality must have them fill out an individual police form.
It could be:
- A hotel,
- Or a village or family holiday home,
- Or a residence or residential tourist village,
- Or furnished tourist accommodation,
- Or a guest room
- Or a camping or caravan site (or other developed sites).
The foreign customer must complete and sign the form upon arrival.
For the purposes of preventing disturbances of public order, judicial investigations and research in the interest of individuals, hoteliers, operators of holiday villages and family homes, tourist residences and residential villages, rental companies furnished for tourism and guest rooms, operators of campsites, caravans and other developed sites are required to fill out, or have them fill out and sign by the foreigner, upon arrival, an individual police file, including the model is set by joint order of the Minister of the Interior, the Minister responsible for immigration and the Minister responsible for tourism.
The personal data thus collected are in particular:
- The name and first names
- The date and place of birth
- The foreigner's usual domicile
- The foreigner's mobile phone number and email address
- The date of arrival at the establishment and the expected date of departure.
Children under the age of 15 may appear on the sheet of an accompanying adult.
The files thus established must be kept for a period of six months and handed over, at their request, to the police and gendarmerie units. This transmission can be done in dematerialized form.
Natural or legal persons renting bare premises are not subject to the obligations provided for in the above paragraphs.
The lessor must keep the card for 6 months. He must hand it over, at their request, to the police and gendarmerie services (automatic transmission is no longer compulsory since 2015).
A clause in the rental contract may authorise the lessor to fill in the individual police form with the information obtained during the reservation so that the customer only has to sign the form on arrival.
10. Is there Foreign Police integration required?
The Police Report is not required to be sent automatically. It is only to be made available upon request from the police. It can be in a dematerialised format.
11. Any other Statistical Authority reports required?
The INSEE (Institut National de la Statistique et des Etudes Economiques) surveys the frequentation in the hotel industry through monthly surveys. These are mandatory and need to be completed and sent back. This can be done by email, fax or online.
Data collection requirements
12. What data of guests should be collected (and does Mews require during online check-in) by law?
European GDPR (RGPD) is in place.
13. Is it legal to take copies of passports?
As per experience it is required to take Passports of international travellers and thus the hotel is allowed to scan / photocopy these documents. For French Citizens it is possible to request for an Identification but the client has the right to refuse this request. At that moment, the hotelier also has the right to refuse access to any service or product to this client.