Subcontracting Invoicing in France 2026: VAT Reverse Charge in Construction, Mandatory Mentions and the 1975 Subcontracting Act

Up to date as of 15 May 2026.

Subcontracting Invoicing in France 2026: VAT Reverse Charge in Construction, Mandatory Mentions and the 1975 Subcontracting Act#

Subcontracting sits at the heart of the French construction sector's business model, yet it also generates a disproportionate share of VAT errors, tax reassessments and payment disputes. Two separate regimes apply simultaneously: the fiscal rule on VAT reverse charge (CGI art. 283 nonies) and the contractual protection framework of Law no. 75-1334 of 31 December 1975. Misunderstanding either one can expose a business to VAT surcharges, penalties or loss of the right to direct payment.

This operational guide from Hayot Expertise (Paris) sets out the legal framework, distinguishes the applicable situations, details mandatory invoice mentions, and illustrates the differences between construction and intellectual services through two practical case studies.

Quick summary: In French construction subcontracting, the main contractor — not the subcontractor — self-assesses and declares VAT (CGI art. 283 nonies). The subcontractor issues an invoice exclusive of VAT, bearing the mention "Autoliquidation" and the reference "Article 283-2 nonies du CGI". Outside construction, VAT is invoiced normally. In parallel, the 1975 Act requires the subcontractor's acceptance by the project owner and grants the subcontractor a right to direct payment if the main contractor defaults.

Two bodies of rules govern subcontracting in France simultaneously. Treating them as a single regime is the root cause of most subcontracting disputes we see in cabinet, in both construction and service industries.

Law no. 75-1334 of 31 December 1975 is the framework legislation on subcontracting. It sets out contractual obligations (acceptance of the subcontractor by the project owner, approval of payment terms, performance bonds), the right to direct payment when the main contractor defaults and the civil sanctions attached to non-compliance. It applies to all sectors but finds its primary application in construction, where the financial exposure of subcontractors to the failure of a main contractor is at its highest.

Article 283 nonies of the CGI introduces a specific VAT mechanism: in construction subcontracting between VAT-registered businesses, VAT is not collected by the subcontractor but by the main contractor. This is known as reverse charge or "autoliquidation". It was introduced in 2014 to combat VAT fraud schemes where subcontractors collected VAT without remitting it while main contractors deducted it normally. Today it is the default audit topic for any inspection of a construction company.

These two texts coexist: one falls under contract law, the other under tax law. A business can comply with one and violate the other. A subcontractor who is correctly accepted by the project owner under the 1975 Act may still issue a non-compliant invoice if it forgets the "autoliquidation" mention required by Article 283 nonies — and the reverse is equally true.

Under the 1975 Act, subcontracting is the operation by which a contractor, under its own responsibility, entrusts to another party — the subcontractor — the performance of all or part of a works contract or a portion of a public contract concluded with the project owner. The main contractor remains the sole counterparty of the project owner; the subcontractor never enters into direct contractual relations with the project owner unless direct payment is triggered.

In civil law terms, a subcontracting agreement is a contract for work and services (louage d'ouvrage) under article 1779 of the Civil Code, whereby the subcontractor undertakes to carry out defined work for an agreed price. It is distinct from a sales contract (the subcontractor sells a result, not goods), from an employment contract (the subcontractor remains autonomous from the main contractor) and from a mandate (the subcontractor acts in its own name, not on behalf of the main contractor).

Three conditions must be met simultaneously for the qualification of subcontracting to apply:

1. The existence of a main contract between the principal contractor and a project owner
2. The delegation of a part of that contract to a third party
3. The performance of works under the responsibility of the main contractor, who retains technical direction and ultimate liability towards the project owner

If any of those three conditions is missing, the relationship is not subcontracting in the legal sense — it is either a direct supply contract, a joint venture or an autonomous service provision. Misqualifying the relationship leads to applying the wrong VAT regime and losing the protections of the 1975 Act.

A materials supplier who sells without installing is not a subcontractor. The reverse charge does not apply to a pure sale of materials, unless the supply is inseparably linked to the installation (the "complex supply" principle, confirmed by the BOFiP). A supplier of bricks or concrete who delivers to the site without installing them follows the standard VAT rules; the brick layer who lays the same bricks falls under reverse charge.

A joint venture partner (co-traitant) bears joint liability to the client: each member of the consortium invoices the project owner directly, often pro rata to its contribution. There is no economic subordination relationship between the partners and the 1975 Act does not apply. VAT is invoiced normally by each partner on its own share of the contract.

Umbrella employment (portage salarial) creates no subcontracting relationship. The consultant remains an employee of the umbrella company, which invoices the client. The construction VAT reverse charge does not apply in this structure, and the 1975 Act is irrelevant since there is no contractor-to-subcontractor chain.

Operations covered#

The reverse charge applies to construction, repair, cleaning, maintenance, transformation and demolition works performed between taxable persons in the building and civil engineering sector. NAF codes 41 (building construction), 42 (civil engineering) and 43 (specialised construction works) are the primary scope. The mechanism covers structural work, electrical installations, plumbing, roofing, insulation, glazing, painting, plastering, flooring and the demolition of buildings.

It also covers supply of goods with installation where the service constitutes the ancillary of the supply — for example tiles supplied and laid by the same tiler, kitchens supplied and installed by the same fitter, or windows manufactured and installed by the same joiner. The administrative practice is to look at the predominant nature of the supply: if the installation materially alters the property, the whole invoice falls under reverse charge.

Cumulative conditions#

• Both parties (main contractor and subcontractor) are VAT-registered taxable persons
• The supply relates to construction works within the meaning of the CGI
• The relationship qualifies as subcontracting (not joint venture, not sale)

If any of those conditions is missing, the standard VAT regime applies and the subcontractor must invoice with VAT at the rate applicable to the underlying works (typically 20%, or 10% / 5.5% for some residential renovation works).

VAT Reverse Charge — Included and Excluded Cases 2026#

Our reading: The boundary between "supply with installation" and "sale of materials + separate labour" is a source of disputes. Requalifying a contract as a sale to avoid the reverse charge is risky and likely to be challenged during a VAT audit. Secure the correct qualification at the time of drafting the contract. When in doubt, split the invoice into clearly identified lines (supply on one line, installation on another) and apply the correct VAT treatment to each line — provided the underlying contract allows the split.

Under article L441-9 of the Commercial Code and the BOFiP guidance, a construction subcontractor's invoice subject to reverse charge must include:

1. Invoice number (sequential, unalterable, with a continuous chronology)
2. Issue date
3. Identity and SIREN of the subcontractor
4. Identity of the main contractor (including its full registered name and SIREN)
5. Precise description of the works (nature, location, period of execution)
6. Amount excluding VAT
7. Explicit mention "Autoliquidation" in full text, visible on the face of the invoice
8. Legal reference: "Article 283-2 nonies du CGI"
9. No VAT line whatsoever (no rate, no amount, no "VAT 0%")

The most frequent error is to add a 10% or 20% VAT line out of habit or because the invoicing software has not been correctly configured. This exposes the subcontractor to remitting VAT it should not have collected and the main contractor to a refusal of deduction. In addition, the invoice must carry the standard commercial mentions of Articles L. 441-9 and L. 441-10 of the Commercial Code: payment due date, late-payment penalty rate (three times the legal rate by default), EUR 40 flat recovery fee for late payment, discount terms (or "no discount for early payment"), and the IBAN where the subcontractor wishes to be paid.

For the 2026 e-invoicing reform, the "Autoliquidation" mention must also be embedded as a structured data field in the invoice file transmitted through the partner dematerialisation platform (PDP) or public portal (PPF). An invoice that mentions reverse charge in free text but does not carry the corresponding code may be rejected automatically by the recipient's platform.

Net cash effect is nil, but the 2,000 euros must be declared on the CA3 return — in box 2A "operations subject to reverse charge VAT" and simultaneously in the deductible VAT line. The HT amount of 10,000 euros must also be reported among the operations not subject to French output VAT so that turnover reconciliation works correctly. Accounting systems that do not handle reverse charge automatically require a dedicated coding scheme at invoice booking, otherwise the analytic axes get scrambled and the next year-end review becomes painful.

No VAT collected, nothing to declare as output VAT on CA3 for this transaction. However, the subcontractor must still record the HT amount in the appropriate line of the CA3 (operations not subject to VAT in France) and may continue to deduct input VAT on its own purchases (materials, sub-subcontractors, fuel, equipment hire) under the standard rules. A subcontractor that operates exclusively under the reverse charge regime is therefore in a structural VAT credit position and can request a refund through the standard procedure if the credit exceeds the legal threshold.

Acceptance and approval of payment conditions#

The main contractor must submit each subcontractor to the project owner for acceptance and have the payment conditions approved. This double obligation applies to both public contracts and private contracts exceeding 600 euros excluding VAT. The acceptance covers the identity of the subcontractor and its skills; the approval covers the prices, payment dates and the security mechanism. Without acceptance and approval, the subcontractor loses the right to direct payment and the main contractor exposes itself to civil sanctions under Article 14-1 of the 1975 Act.

Performance bond or payment delegation#

For private contracts exceeding 600 euros excluding VAT, the main contractor must provide either a bank guarantee (caution bancaire) covering the sums due to the subcontractor or a payment delegation (delegation de paiement) from the project owner to the subcontractor. The delegation is the simpler and cheaper option, but it requires the project owner to accept the role of paying entity. The bank guarantee is more flexible but represents a real cost (typically 0.5% to 1.5% per year of the secured amount) borne by the main contractor.

This protection mechanism is one of the most under-applied provisions of French commercial law. A subcontractor that begins work without a bank guarantee or payment delegation in place puts itself in the position of an ordinary unsecured creditor in case of insolvency of the main contractor.

Article 12 of the 1975 Act provides the subcontractor with a direct action against the project owner when the main contractor fails to pay. This requires acceptance and approval, a formal notice unanswered within 15 days, and notification to the project owner. In public procurement, direct payment is automatic when the subcontracting amount exceeds 600 euros excluding VAT — the subcontractor simply notifies the procurement authority.

The under-estimated risk: In private contracts, many subcontractors delay acting and allow their claim to become time-barred. The standard limitation period is five years from the date of exigibility of the claim under Article 2224 of the Civil Code. We routinely meet subcontractors who discover the existence of direct payment three or four years after the dispute — by which point the project owner has already paid the main contractor in full and the bankruptcy of the main contractor has dispersed the available cash.

In addition, the main contractor is jointly and severally liable, under Article L. 8222-1 of the French Labour Code, for the unpaid social contributions of the subcontractor whenever the subcontracting contract exceeds EUR 5,000 excluding VAT. To shield itself, the main contractor must obtain every six months a URSSAF vigilance certificate (attestation de vigilance) from the subcontractor confirming that all social contributions have been paid and that workers are properly declared. Many main contractors discover this obligation only when URSSAF triggers the joint liability mechanism against them.

Case 1 — Construction Company Paris 18th, Structural Works at 50,000 Euros Excluding VAT#

A general contractor (NAF 4120A, VAT-registered) subcontracts structural works to an independent mason for 50,000 euros excluding VAT. Mason's invoice: 50,000 euros HT — mention "Autoliquidation" — reference "Article 283-2 nonies du CGI" — no VAT.

At the general contractor's level: subcontracting purchase 50,000 euros, self-assessed output VAT 10,000 euros declared on CA3, deductible input VAT 10,000 euros (recovered simultaneously). Net cash impact: zero. At the mason's level: HT invoice of 50,000 euros, no VAT to remit. The mason continues to deduct input VAT on its own materials and tools through the standard procedure.

1975 Act protection: The mason must be formally accepted by the project owner (typically the owner of the building) and approved on its payment conditions. A bank guarantee or payment delegation must be in place before the first invoice. The main contractor must also collect the URSSAF vigilance certificate every six months until the works are complete.

Case 2 — Digital Agency Paris 11th, React Development at 15,000 Euros Excluding VAT#

A web agency (NAF 6201Z) subcontracts the development of a React application to a freelance developer (NAF 6202A) for 15,000 euros excluding VAT. Invoice: 15,000 euros + 20% VAT = 18,000 euros TTC. No "Autoliquidation" mention — inapplicable outside the construction sector.

VAT is invoiced normally because the supply is an intellectual service of software development, which falls outside the scope of Article 283 nonies. The agency recovers 3,000 euros of input VAT on its next CA3.

The 1975 Act may still apply if the relationship qualifies as legal subcontracting (delegation of part of a main contract with a client of the agency, under the agency's responsibility) — but the construction VAT reverse charge is in any case irrelevant. Many digital agencies wrongly believe that all subcontracting attracts the reverse charge: it does not.

• VAT invoiced by the construction subcontractor: the subcontractor adds a 10% or 20% VAT line by reflex or because the invoicing tool was not reconfigured. The main contractor cannot deduct VAT that was wrongly charged on a reverse-charge transaction (Article 271-II-1-a CGI). The total cost of this single error easily reaches 20% of the invoiced amount plus penalties.
• Missing "Autoliquidation" mention: the invoice is non-compliant; the deduction may be challenged in a VAT audit even when all other obligations are met. This is one of the easiest errors to catch in pre-audit reviews.
• Failure to obtain acceptance: the subcontractor loses its direct action against the project owner. When the main contractor fails, the subcontractor becomes an ordinary unsecured creditor and rarely recovers more than a fraction of its claim.
• Confusion between subcontracting and advisory mission: when the relationship is reclassified by a tribunal as autonomous service provision (or as disguised employment), the 1975 Act protection is entirely absent and the labour-law consequences may be severe.
• Invoicing software not configured: Sage, EBP, Pennylane, Evoliz, Quickbooks and others must be set up to create a specific "BTP subcontracting — reverse charge" invoice template, otherwise the standard template populates a VAT line by default.
• Missing URSSAF vigilance certificate: the main contractor exposes itself to joint and several liability for the subcontractor's unpaid social contributions whenever the contract exceeds EUR 5,000.
• No tracking of reverse-charge VAT in the books: entries that fail to mirror output and input VAT distort the CA3 reconciliation and may trigger an audit query at year-end.

During a VAT audit in construction, inspectors systematically review:

• Consistency between the NAF code declared and the actual application of the reverse charge
• Presence of all mandatory mentions on outgoing and incoming invoices (Autoliquidation, Article 283-2 nonies, identification details, sequential numbering)
• Correct declaration of self-assessed VAT on CA3 (box 2A and corresponding deductible line)
• Existence of signed subcontracting contracts and the corresponding acceptance and approval documents from the project owner
• URSSAF vigilance certificates collected every six months
• Reconciliation between the accounting general ledger and the CA3 returns over the audited period

Source: BOFiP BOI-TVA-DECLA-10-10-20 (consult the version in force at the date of the audit).

• CGI article 283 nonies is stable for 2026 with no anticipated reform under the 2025 Budget Act.
• The electronic invoicing mandate is being phased in (implementation timeline to be confirmed by decree). Reverse-charge invoices will need to be issued via a registered platform (PDP or public portal PPF) and the "Autoliquidation" mention must be transmitted as a structured data field alongside the seller's and buyer's identifiers.
• The 1975 Act has not been substantively amended in 2025-2026 (to be verified on Légifrance). The 600 euros threshold for acceptance and approval, and the 5,000 euros threshold for URSSAF joint liability, remain applicable.
• Pre-rollout review of subcontracting flows is strongly recommended: a misqualification today translates into an automated rejection or discrepancy alert tomorrow once invoices transit through certified platforms.

• Is the recipient a French VAT-registered taxable person? Has its VAT identification number been verified?
• Does the supply fall within the construction works definition of Article 283-2 nonies CGI?
• If reverse charge applies, does the invoice carry the explicit "Autoliquidation" wording with the legal reference?
• Are the mandatory commercial details present (payment due date, late penalty rate, EUR 40 flat recovery fee)?
• Is the URSSAF vigilance certificate up to date (renewed every six months) for contracts above EUR 5,000?
• Has the subcontractor been formally accepted by the project owner with approval of payment terms?
• Is a bank guarantee or payment delegation in place for contracts above EUR 600?
• Is the invoice booked with the proper analytic codes to allow the CA3 and DAS2 reconciliations?

A monthly review by the accounting team on the top 20 invoices in volume catches most recurring errors before they appear in an audit.

Sources: Légifrance — Law no. 75-1334 of 31 December 1975; CGI art. 283 nonies and 271-II-1-a; Civil Code art. 1779 and 2224; Commercial Code art. L. 441-9 and L. 441-10; French Labour Code art. L. 8222-1 and L. 8222-2; BOFiP BOI-TVA-DECLA-10-10-20 and BOI-TVA-CHAMP-10-10-40. Written and reviewed by Samuel Hayot, chartered accountant (expert-comptable) in Paris. Up to date as of 15 May 2026.