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France to loosen financial services option to tax for VAT

VAT saving opportunities for banks, credit and securities businesses

The French 2022 finance bill includes a proposal to ease the terms under which financial services business may opt for taxation (VAT). This would enable banking, and other players in the sector (excluding insurance) to waive the right to not charge VAT on B2B transactions on a narrower range of services than at present. Learn more about French VAT in our country guide.

Currently, there is an EU VAT exemption on financial services provided to non-VAT registered customers, although the EU review of banking and insurance VAT is looking at reforming this.

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France eases banking VAT exemption

Currently, any business choosing to waive the exemption in France must do so for most services as a whole. The current list of services open to the option to tax without cherry-picking are:

  • credit operations with respect to receipts other than interest;
  • operations concerning commercial paper with respect to receipts other than discounts and similar commission fees;
  • operations concerning securities for the account of their customers;
  • administration of investment funds; and
  • factoring operations.

The 2022 finance proposal would allow businesses to choose the ones they wished to make subject to VAT on B2B transactions, so significantly widening the number of businesses that would chose to adopt it.

Poland financial services option to tax is to be updated in 2022.

VAT Calc’s VAT Calculator can effortlessly switch between exemption and taxing options, including reverse charge treatment, without the need for outside IT help or any support from internal ERP teams to change manual customs rules or coding. You are in control.


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