Factsheet: Tax Code - VAT reduction

Tax Code - VAT reduction

Key Information

Country/Region:

Full name of Instrument & Measure (English): 
Tax Code - VAT reduction
Full name of Instrument & Measure (native language): 
Code général des impôts - réduction TVA
Description: 
In France, the purchase of commodities is subject to a reduced VAT rate if they are related to investments in the improvement, the transformation, the fittings, the conservation or certain equipment of buildings constructed more than two years prior (Code Général des Impôts, art. 279-0 bis, 1). Thus, the purchase of such commodities by private individuals is indirectly promoted. This incentive was introduced by the Finance Act 2000 (Loi n° 99-1172, Art. 5) and amended by subsequent annual Finance Acts. Loi n° 2000-1352 (art. 67) introduced the tax credit (Crédit d'Impôt) for renewable energy sources and made them eligible for a reduced VAT rate of 7%. This tax incentive is subject to a multitude of non-legislative standards. The reduced VAT rate applies to services, equipment and delivery (Instruction fiscale 3 C-7-06 N°202, title 1, chapter 2, sections 1, 75). In order for the equipment to be eligible, it shall be delivered and installed by the same company (either directly by this company or by a sub-contractor), and the equipment and the installation works shall be listed on the same invoice (Instruction fiscale 3 C-7-06 N° 202, title 1, chapter 2, sections 1, 82).
Goal/Aim: 
Stimulate investments in renewable energy.

Sector/Topic targeted:

Responsible Authority: 
Ministère de l’Economie et des Finances - Ministy of Economic Affairs and Finance

Status:

Year Instrument & Measure Started: 
2000
Year Last Instrument & Measure was last Amended: 
2013