International recruitment firm: VAT, accounting and V.I.E in 2026

Updated 25 May 2026 — Engaging an international recruitment firm raises three concrete questions that a business owner must resolve before the first invoice arrives: which account to book the fees to, how to reclaim VAT on an invoice issued from within the EU or a third country, and what is the real trade-off between using a firm, the Volontariat International en Entreprise (V.I.E, a Business France programme), and direct recruitment. These choices affect cash flow, DSN payroll reporting and the social-security regime of the person recruited.

For background on the relevant activity codes and sector classifications, see NAF codes, sectors and occupations.

Quick answer (50 words): fees paid to an international recruitment firm are booked as an operating expense (account 6228), fully tax-deductible. If the firm is established outside France — whether in the EU or a third country — French VAT is self-assessed by the French company under the reverse-charge mechanism (CGI art. 259-1). The V.I.E is a more flexible alternative for testing a market or establishing a first commercial foothold.

An international recruitment firm is a specialist intermediary that searches for, selects and places candidates in roles with a cross-border dimension: a position abroad for a French candidate, recruiting a foreign profile for a French company, or opening an overseas subsidiary.

Its fees average 15 to 25% of the recruited position's gross annual salary. Some firms work on a "contingency" basis (fees due only on successful hire); others on a "retainer" basis (a non-refundable upfront payment of 30 to 50% of the total fee upon signing the mandate).

The accounting treatment is straightforward, but it is worth clarifying the position on retainers and ancillary costs.

Recruitment fees are never capitalised, even when the hire is strategic (CEO, CFO, CTO). They constitute an operating expense of the financial year, in accordance with the PCG's principle of period independence. The argument that "this hire creates lasting value" is not sufficient to justify capitalisation as an intangible asset.

In practice: check that the firm's invoice explicitly states the nature of the service (candidate search and selection), the position concerned, and the date of performance. These details simplify the audit trail in the event of a tax review.

This is the point most often mishandled by companies using a foreign firm for the first time.

Firm established in France#

The situation is simple: the French firm invoices its fees excluding VAT plus 20% VAT. The client company deducts VAT in the usual way (compliant invoice, professional use, activity subject to VAT).

Firm established in the European Union#

The applicable rule is the place of supply of B2B services, set out in article 259-1 of the Code général des impôts (CGI): the place of taxation is that of the recipient (the French company purchasing the service), not that of the supplier.

The EU firm must therefore invoice without VAT, with the mandatory note "Reverse charge — VAT due by the recipient" and your French VAT number. The French company:

1. Self-assesses French VAT at 20% — line 02 of the CA3 VAT return
2. Deducts it immediately — line 17 or 19 depending on the applicable deduction regime
3. Files a DES (Déclaration européenne de services) if the annual amount exceeds the threshold in force (à vérifier)

The cash-flow impact is nil, but the declaration is compulsory. Omitting it exposes the company to a 5% surcharge plus late-payment interest (CGI art. 1788 A).

Firm established outside the EU (United Kingdom, Switzerland, United States, etc.)#

The same reverse-charge mechanism applies, on the same legal basis (CGI art. 259-1: B2B service taxable at the location of the recipient). The invoice arrives without VAT; the French company self-assesses and deducts French VAT at 20%. There is no UK VAT, no Swiss VAT and no US sales tax to pay from France.

The underestimated risk: failing to apply the reverse charge on international services received from non-French providers is the most common error on this type of purchase. It is systematically flagged during tax audits (VCU — vérifications de comptabilité unilatérale) conducted with companies that have foreign service suppliers and have not received specialist guidance on the point. At Hayot Expertise, we encounter it in the majority of files involving companies with foreign service providers that have not had proper support on this issue.

The Volontariat International en Entreprise (administered by Business France) allows a company to send a young person aged 18 to 28 abroad for 6 to 24 months without a French employment contract. The volunteer receives an allowance (not subject to French social-security contributions) and is covered by French social security through the regime for international volunteers.

The all-in monthly cost (allowance + Business France management fees) in 2026 varies by host country. The indicative figures published by Business France are as follows (à vérifier on the Business France simulator — amounts are revised periodically):

Trade-off — when to choose the V.I.E rather than a recruitment firm:

The V.I.E is more appropriate when:

• The objective is to explore a market or establish a first commercial presence, not to recruit permanently.
• The profile sought is a recent graduate to be trained on the ground.
• The company does not yet have a legal entity in the target country.
• The budget is constrained and a 12-month mission is enough to validate the opportunity.

A recruitment firm + permanent local contract is more appropriate when:

• The hire is long-term (subsidiary opening, leadership position).
• The profile is senior and must be operational immediately.
• The target market is known and the local structure is already in place.

The distinction between a posted worker (salarié détaché) and an expatriate (salarié expatrié) changes the entire social-security, tax and employer-liability regime. This is a decision that must be framed before the contract is signed.

Case 1 — Local recruitment with a local-law contract

The employee is hired directly by your subsidiary or branch in the target country. Local payroll, local social-security regime, outside the French DSN reporting obligation. If you have no local entity, an EOR (Employer of Record) allows legal employment in the country without incorporating a company.

Case 2 — French employee posted abroad

The French employment contract is maintained. The employee is posted for a limited period (3 years, renewable once within the EU under form A1; variable duration under bilateral conventions outside the EU). Affiliation to the French social-security system is maintained, DSN reporting remains compulsory and payroll stays French.

Case 3 — French employee on expatriate status

The French employment contract is terminated. A new local-law contract is signed in the host country. The employee exits the French social-security system; voluntary membership of the Caisse des Français de l'étranger (CFE) is available to preserve cover. The employee's personal tax regime also changes.

Hayot Expertise advice: before any international recruitment, confirm with your chartered accountant (expert-comptable) (1) the correct account for booking fees and the VAT recovery position, (2) the reverse-charge VAT treatment if the firm is established outside France, and (3) the legal status of the employee (local, posted, expatriate) and its impact on DSN, social contributions and personal taxation. These three variables determine the true all-in cost of the recruitment.

The DGFiP pays particular attention to reverse-charge VAT on services received from providers established outside France. This is a point systematically reviewed during VCU audits of companies with foreign service suppliers. URSSAF also scrutinises the status of employees recruited internationally (posted vs expatriate) when assignments are extended.

• Confirm the firm's location (France, EU, non-EU) to determine the applicable VAT regime
• Confirm the invoicing method (ex-VAT with reverse-charge wording, or ex-VAT plus French VAT if a French firm)
• Open account 6228 in the analytical chart of accounts
• Configure reverse-charge VAT in the accounting software (CA3 return, lines 02 and 17/19)
• Plan for the DES filing if the firm is established in the EU
• Define the employee's status (local, posted, expatriate) before signing the contract

We advise business owners on fee accounting, reverse-charge VAT, the choice between a firm, the V.I.E and direct recruitment, and the payroll classification of the recruited employee.

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This article provides general information. Intra-EU VAT rules and V.I.E terms may change. Verify the conditions applicable to your situation with your chartered accountant.

Updated 25 May 2026. Sources: CGI art. 259-1, BOFiP BOI-TVA-CHAMP-20-50-30, Business France (V.I.E), Code de la sécurité sociale art. L. 761-1.