Deduction of VAT on business purchases

Verified 24 September 2026 - Entreprendre Public Service / Directorate of Legal and Administrative Information (Prime Minister)

Many companies are subject to a actual VAT regime and so indebted of the tax. They must therefore collect by billing to their customers then remit it to the tax authorities. The application of the actual VAT regime also allows them to deduct VAT paid on business purchases made upstream. In other words, they can recover that deductible VAT when they make their VAT returns.

To be able to deduct VAT, following conditions the following shall be complied with:

  • Company liable for VAT : the undertaking must be liable for VAT, and therefore subject to a actual VAT regime (real simplified or normal real). It must not be exempt from VAT or be exemption from VAT.
  • Professional use : the VAT to be deducted must relate to purchases of goods or services necessary for the operation of the undertaking. If the purchase is made for the personal purposes of the manager, then the VAT applied to this purchase cannot be refunded.
  • Supporting Document : the company must be able to justify purchases in respect of which the deduction is claimed. For the tax administration, only one invoice may justify the deduction. This invoice must, however, contain all the necessary information, in particular, the amount or rate of VAT. In the event of an inspection, the tax authorities may require the VAT deducted by the undertaking to be refunded.
  • Due : deduction is only possible from the moment VAT is due from the supplier. VAT can only be deducted from the moment it becomes due. Indeed, the notion of chargeability is important because it determines the period during which you will have to declare VAT and at the same time deduct it.

The chargeability of VAT refers to the fact that the tax authority may require the person liable to pay the tax associated with a transaction.

The due date differs according to the type of transaction carried out:

  • Sale of goods and goods : VAT is due at the time of delivery (usually in correlation with the date of the invoice or the date of the transaction being debited to the customer account). When a deposit is paid, VAT becomes deductible as soon as the deposit is paid.
  • Provision of services : VAT is payable at the time of receipt of the price. However, the company can opt for the debit regime. In this case, VAT is due on the date of the invoice.

Example :

A company buys goods for the purposes of its business from another company. She places an order on January 13 and receives the products on February 3. VAT becomes chargeable at the time of delivery as it is a sale of goods. Since the delivery took place in February, VAT must be declared and deducted when declaring VAT in February (i.e. between 15 and 24 March).

For more information, you can consult our fact sheet on the chargeability of VAT.

Warning  

Some goods or services may be excluded from the right to deduct. These include, for example, expenses for renting accommodation for the manager, or for transporting people (VTC, taxis...).)

The VAT deduction is made at the time of the VAT return, each year, quarter or month in accordance with the terms applicable to the undertaking.

This deduction is made by imputation : i.e. it is carried out taking into account all transactions subject to VAT which occurred during the reference period (year, quarter or month). The VAT paid for business purchases is thus deducted from the VAT collected on all sales made.

When the deductible VAT is higher than the tax collected, it is said that the company has a VAT credit. In other words, the tax authorities owe them VAT because they have overcharged them.

The company then has 2 possibilities:

  • Either postpone this tax credit for subsequent tax periods, i.e. this deductible VAT will be charged, until exhaustion, on subsequent returns.
  • Either request reimbursement of all or part of its VAT credit.

FYI  

If the person liable forgets to take account of a tax credit when making his VAT return, he may still charge it on any subsequent declaration subscribed before 31 December of the second year following that of the omission.

For example, if the taxable person subject to the normal real VAT system forgets to charge a VAT credit in his monthly declaration of June of year N, he may charge it at the latest on the declaration of December of year N+2.

The taxable person who benefits from a VAT credit may, under certain conditions, request a refund.

FYI  

A VAT credit may appear when the VAT that a company has paid on its purchases exceeds the VAT that it has collected and paid back to the administration on its sales

The refund request is made by sending the tax authorities the form corresponding to their VAT system:

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Simplified real VAT regime

Depending on the amount of the company's VAT credit, the company can apply for an annual or half-yearly refund.

Annual VAT refund

It is possible when the VAT credit amount is at least equal to €150.

It is possible when the VAT credit amount is at least equal to €150.

To apply for an annual VAT credit refund, the amount of the company's VAT credit must be at least equal to €150.

The request must be made at the time of the annual VAT return:

  • If the accounting year of the undertaking coincides with a calendar year: 2e working day after 1er May.
  • If the accounting year of the undertaking does not coincide with a calendar year: 3 months after the year-end date.

The claim must be made using the form No. 3517-S.

Warning  

This form is accessible only as area code because the process is mandatory online.

More information is available on the page "How to submit business tax returns: EDI or EFI?»

Half-yearly repayment

It is possible when the VAT credit amount is at least equal to €760.

It is possible when the VAT credit amount is at least equal to €760.

To apply for a half-yearly VAT credit refund, the VAT credit must be at least equal to €760.

The request must be made every 6 months from the closing date of the company's accounting year at the time of the VAT return it makes that month.

The application for registration must be made using the form no. 3519. It must also attach to its refund application invoices indicating the amount of VAT for which the refund is requested.

Warning  

This form is accessible only as area code because the refund request must be made online.

More information is available on the page "How to submit business tax returns: EDI or EFI?»

Normal real VAT regime

Depending on the amount of the company's VAT credit, the company can apply for an annual, quarterly or monthly refund.

Annual VAT refund

It is possible when the VAT credit amount is at least equal to €150.

It is possible when the VAT credit amount is at least equal to €150.

To apply for an annual VAT credit refund, the amount of the VAT credit must be at less equal to €150.

The request must be made at the time of the January VAT return corresponding to the VAT of the month of December or the 4e quarter.

The claim must be made using the form no. 3519.

Warning  

This form is accessible only as area code because the refund request must be made online.

More information is available on the page "How to submit business tax returns: EDI or EFI?»

Quarterly Reimbursement

It is possible when the VAT credit amount is at least equal to €760.

It is possible when the VAT credit amount is at least equal to €760.

To apply for a quarterly VAT credit refund, the VAT credit must or at least equal to €760.

A request can be made the month following the first 3 quarters of the year. In other words, the refund can be claimed on the VAT return made between 15 and 24 April, 15 and 24 July or 15 and 24 October.

The request must be made using the form no. 3519. The company must also attach to its refund application invoices that indicate the amount of VAT it is requesting to be refunded.

Warning  

This form is accessible only as area code because the refund request must be made online.

More information is available on the page "How to submit business tax returns: EDI or EFI?»

Monthly Refund

It is possible when the VAT credit amount is at least equal to €760.

It is possible when the VAT credit amount is at least equal to €760.

To apply for a monthly VAT credit refund, the VAT credit must or at least equal to €760.

The request must be made every month at the time of the VAT return of the company using the form no. 3519.

Warning  

This form is accessible only as area code because the refund request must be made online.

More information is available on the page "How to submit business tax returns: EDI or EFI?»

The form shall be completed and sent by electronic means:

  • Either by a manual online entry form (EFI mode). The company completes it itself, by connecting:

On his professional space impots.gouv.fr:

Online tax account for professionals (EFI mode)

Or on his account Portailpro.gouv. :

Business account portailpro.gouv

  • Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example an accountant) enters all the information required and then sends it to the administration.

These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »

Please note

The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.

Depending on the VAT system of the person liable, the refund may be annual, semi-annual, quarterly or monthly and may include specific arrangements.

VAT applicable to business purchases is in principle deductible. However, there are certain goods or services from which VAT cannot be deducted, including:

  • Goods or services related to accommodation provided free of charge to the company's managers and staff. This does not apply to guarding, security or surveillance personnel housed on construction sites or on company premises.
  • Gifts not exceeding €73 TTC per object and per year for the same beneficiary (intended for customers, suppliers or staff)
  • Goods or services used for more than 90% for purposes outside the company (for example, an entrepreneur buys software that he uses for more than 90% for personal needs)
  • Vehicles designed for the transport of persons or for mixed use (professional and personal use) and which belong to the company. This does not apply to passenger transport undertakings, vehicle rental undertakings subject to VAT and driving schools.

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