Marine Le Pen’s 2027 presidential economic programme raises the prospect of VAT collection at source to combat fraud
Potentially introducing split payments to combat fraud
France’s National Rally (RN) has proposed a new VAT collection mechanism intended to generate €18 billion in additional annual revenues as part of its economic programme for the 2027 presidential election.
Although the precise VAT mechanism has not been detailed, previous National Rally proposals suggest that VAT collection at source, potentially through a split payment system, could be under consideration.
How would VAT split payments work?
Under a conventional VAT system, suppliers collect VAT from customers and subsequently remit the tax to the authorities through periodic VAT returns. A split payment mechanism intervenes earlier in the payment process, separating the VAT element from the supplier’s proceeds and directing it into a designated account or to the tax authorities.
National Rally representatives have previously advocated VAT collection at source through payment service providers, particularly to combat fraud in online commerce.
Such a mechanism would have precedents elsewhere in Europe:
- Poland: Mandatory split payments apply to specified transactions involving designated goods and services.
- Italy: Certain public-sector customers and other designated purchasers pay VAT directly to the Treasury rather than their suppliers.
However, neither country operates a universal split payment system covering all transactions.
Can France recover €18 billion in VAT?
The proposed revenue target has attracted scrutiny. Estimates cited in commentary on the programme place France’s annual VAT gap at approximately €9 billion to €15 billion, below the €18 billion expected from the proposed collection mechanism.
Furthermore, the VAT gap includes reporting errors, omissions, insolvencies and other non-fraudulent losses. Not all these amounts could necessarily be recovered through changes to payment processing.
The scope, implementation costs and potential revenue benefits of National Rally’s proposed mechanism therefore remain uncertain.
Implications for France’s electronic invoicing reforms
France began introducing mandatory B2B electronic invoicing and e-reporting in September 2026, providing the tax authorities with significantly greater visibility over taxable transactions.
A VAT split payment mechanism would represent a further step, moving beyond digital transaction reporting towards VAT collection at the point of payment.
For businesses, this could introduce additional payment processing requirements, cash flow implications and reconciliation challenges between invoices, payments, VAT accounts and returns.
Read more in our French VAT Guide.
