France Proposed VAT rate increase in 2014

The French government announced tax rate changes as part of a planned tax relief for companies last week. The proposal intends to make the French companies more competitive on the international market, however in return the VAT rates will be increased.

According to the announcement the standard VAT rate would increase from the current 19.6% to 20%, while the reduced VAT rate would increase from 7% to 10%. Some good news, that the super-reduced VAT rate is proposed to decrease from 5.5% to 5%.

As per the information published the VAT rate changes will be effective from 1 January 2014.

What does this mean for you?

Any change in the VAT rates in France will affect businesses both as suppliers and as customers. Businesses VAT registered in France, doing or planning doing business in France should therefore keep abreast with the developments.