VAT Treatment of Operations between Head Office and Branches in France

According to the principles of value-added tax (VAT), transactions carried out between different entities of the same legal person are normally not taxable. However, due to some court decisions by the Court of Justice of the European Union (CJEU), it has been established that services provided by the headquarters to the branches are subject to the VAT under the following conditions...

– the branch is established in a Member State of the European Union and the main establishment is located in another State (third State or other Member State of the European Union);
– the branch is a member of a “VAT group”. The “VAT group” or grouping of persons corresponds to the option for various legally independent entities to constitute, under certain conditions, a single taxable person in order to exclude from the scope of VAT transactions carried out between them.

Each Member State may or may not open this option for entities established in its territory.