Guidelines for incorrectly invoiced VAT under new administrative standards in France

The French Tax Administration has introduced new guidelines allowing taxpayers to correct invoices with incorrectly charged VAT within a two-year window, aligning with the tax authorities' three-year reassessment period. Suppliers can now recover wrongly invoiced VAT until December 31 of the second year following the taxable event, and they no longer need to prove good faith in their error to qualify for reimbursement.

 

The French Tax Administration published a guideline that clarifies the conditions for amending VAT invoices issued with incorrectly charged French VAT.

The modified French administrative guidelines aim to adjust claim periods for improperly invoiced and deducted Value Added Tax (VAT), aligning with the tax authorities' three-year reassessment window. 

This alignment allows taxpayers to correct invoices within a two-year timeframe. Specifically, the new guidelines stipulate that a reassessment of incorrectly deducted VAT serves as a trigger for reopening the claim period for suppliers. This means suppliers can recover VAT until December 31st of the second year following the taxable event if their wrongly deducted VAT is reevaluated.

For example, if a supplier incorrectly invoiced French VAT in 2022 and the customer's request to deduct this VAT in 2025 is denied due to a tax audit or an application for a VAT refund, the supplier may, if applicable, issue an amended invoice in 2025 that does not include VAT, or by December 31, 2027, the supplier may regularize the wrong VAT that was originally collected. Previously, no new deadline was issued due to the administration's lack of clarification, and the risk of the correction cut-off remained on December 31, 2024. The publication's release implies that there might now be a longer window for changing or removing French VAT.

Moreover, the revised instructions provide relief to taxpayers who have mistakenly invoiced VAT. These taxpayers are no longer required to demonstrate good faith in their error to receive reimbursement, provided there is no risk of loss to the Treasury. This shift encourages a thorough examination of VAT procedures to identify unresolved regularizations.