Bad debt: evidence, VAT and accounting
When a receivable becomes a true bad debt in France, what proof is needed, how VAT adjustments work and how to book the loss.
Expert note: This article was written by our chartered accountancy firm. Information is current as of 2026. For a personalised review of your situation, contact us.
Bad debt: evidence, VAT and accounting
Updated March 2026 - An unpaid invoice is not automatically a definitive bad debt. The distinction between late payment, doubtful debt, impairment and final loss matters for both VAT and accounting.
What proof should be kept?
You should keep:
- ▸invoices and payment terms
- ▸reminders and formal notices
- ▸recovery attempts or litigation records
- ▸insolvency or liquidation evidence where relevant
- ▸internal documentation supporting the accounting decision
See also our guides on VAT returns, VAT for SMEs and the VAT exemption regime.
VAT and accounting treatment
French rules allow VAT adjustment on certain definitively uncollectible receivables, but only under strict conditions and with proper supporting documentation.
Accounting treatment also differs depending on whether you are dealing with doubtful debt, impairment or a final loss.
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Conclusion
The key is consistency between the legal file, the evidence, the VAT treatment and the accounting entry.
Do you have material unpaid receivables to close?
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Article written by Samuel HAYOT
Chartered Accountant, registered with the Institute of Chartered Accountants.
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