VAT on intra-EU B2B and B2C service provisions in 2026

Quick answer. In B2B (recipient is taxable person), VAT is due at the recipient's place of establishment (reverse charge by French provider); mandatory DES filing from first euro to Customs. In B2C (recipient is non-taxable), VAT is due at provider's place in France, except major derogations (electronic services, telecommunications, restaurant consumption, real property, passenger transport, short-term vehicle rental, OSS scheme). CGI Articles 259-1° and 259-2°.

Since 2010, VAT on intra-community service provisions follows precise rules, codified in Articles 259 onwards of the French General Tax Code. Yet in 2026, we still observe many Paris-based SMEs and consulting firms that charge at the wrong regime, forget DES filings, or confuse B2B with B2C.

The reason? These two situations require radically opposite rules:

• B2B: it is the recipient who pays VAT in their country. The French provider invoices zero VAT with « reverse charge » notation.
• B2C: it is the provider who pays VAT in France. Except a handful of dramatic exceptions.

We will detail both cases and associated pitfalls.

The principle: taxation at place of recipient's establishment#

When a French service provider supplies a service to a VAT-registered client established in another EU Member State, VAT is not due in France. The place of taxation is the country where the client has their main establishment or a fixed establishment to which the service is effectively supplied.

Formally, this is Article 259-1° of the CGI, derived from EU VAT Directive 2006/112/CE.

Practical example: Paris consulting firm#

A Paris consulting firm (CAE & Co, fictional) provides an internal audit service to a German company (« GmbH in Munich »). The service is carried out in France (consultant travels), but the « economic » delivery of the service occurs in Munich (local use of the report).

Invoice to GmbH Munich:

• Net amount: 10,000 €
• France VAT: 0 € (reverse charge)
• Notation: « Reverse charge VAT – Article 259-1° CGI »
• Client's intra-community VAT number: DE12345678 (German VAT ID)

Consequence: the GmbH declares this service acquisition in their German VAT return (and recovers German VAT locally if registered). CAE & Co collects zero VAT.

Essential condition: verification of recipient's status#

The provider can only apply this exemption if the recipient is truly VAT-registered in an EU Member State.

How to verify?

1. Request a valid intra-community VAT number (format varies by State: DE, IT, ES, NL, etc.).
2. Mention this number on the invoice (full copy recommended).
3. Validate the number via the EU VIES (VAT Information Exchange System) or each country's official website.

If you invoice without verifying and the customer is non-taxable (e.g., a sole trader misrepresenting as business), you are liable for missing French VAT.

Mandatory invoice notation#

The invoice must explicitly state:

• « Reverse charge » or « Autoliquidation »
• The intra-community VAT numbers of both parties (French provider: FRXX…, EU recipient: DEXX…)
• The legal reference: « Article 259-1° of the CGI »

At Cabinet Hayot Expertise, we tracked a Paris law firm that omitted « reverse charge » notation: a tax assessment of 35,000 € in VAT plus penalties for improper regime application.

Who must file?#

Every French service provider supplying intra-community B2B services must file a European Service Declaration (DES) with Customs (via the online portal douane.gouv.fr).

Critical point: there is no threshold for services — the DES is due from the first euro. A firm invoicing a single 500 € audit to a Luxembourg client must file a DES.

Deadline and frequency#

• Filing deadline: by the tenth business day of the month following the month when VAT became due to the recipient.
• Example: service delivered May 15, 2026, VAT due in May → DES due by June 10, 2026.
• Frequency: monthly declaration for each taxable recipient in another State.

Required DES information#

The provider must declare:

1. Country of recipient
2. Intra-community VAT number of recipient (e.g., DExxxxxxxxx)
3. Monthly net amount of services supplied
4. Operation code (SNP = Intra-community services)

Penalty for missing DES#

Failure or delay in DES filing exposes to:

• Fine: 750 € per missing or inaccurate declaration, raised to 1,500 € if the DES is not filed within 30 days of a formal notice (CGI Article 1788 A)
• Rectification demand: Customs may require retroactive correction
• Regime reversal: if you don't file DES, authorities may presume French VAT was due, triggering assessment.

General rule: taxation at provider's place#

When a French service provider supplies a service to a non-taxable client (private person, foreign unregistered business), VAT is due in France. This is the opposite of B2B.

This general rule is set out in Article 259-2° of the CGI.

Practical example: web agency and private consumer#

A Paris web design firm builds an e-commerce site for a private individual living in Barcelona. The firm is based in Paris.

Invoice to Spanish private individual:

• Net amount: 2,000 €
• France VAT (20%): 400 €
• Total VAT-inclusive: 2,400 €

VAT is due in France, not Spain, because it is the provider's (Paris agency) location that determines taxation.

Seven major derogations (Articles 259-2° A to D)#

However, the general rule has seven exceptions listed under Article 259-2° of the CGI.

We'll examine the four most frequent.

Derogation 1: Electronic services and OSS scheme#

Electronic services include:

• Website access and discussion forums
• Software supply and updates
• Software use via cloud computing
• Digital content creation (video, music, online games)

Place of taxation: the residence or establishment country of the non-taxable recipient, not the provider's.

Example: a Paris software publisher sells accounting SaaS subscription to a non-taxable person in Italy. Even though the publisher is in France, it applies Italian VAT (typically 22%).

Simplification: the provider may register with the OSS (One-Stop Shop) via impots.gouv.fr portal. This allows filing and paying VAT for all non-taxable clients (EU and non-EU) with a single State, instead of registering separately in each country. This procedure is optional and costs 0 €. However, it requires a quarterly VAT return of B2C sales (no entry threshold).

Derogation 2: Telecommunications and broadcasting#

Telecommunications services (mobile plan, Internet, etc.) are taxed at the residence or establishment location of the non-taxable recipient.

Example: a Paris start-up offers bulk SMS service to Swiss businesses and German private individuals. For Swiss (outside EU, taxable), no VAT (free zone). For Germans (non-taxable in EU), German VAT 19%.

Derogation 3: Restaurant consumption#

A Paris restaurant serving a table meal is subject to VAT at the place of consumption (the restaurant itself). No special VAT regime applies if a Belgian tourist eats dinner there — simply, French VAT 5.5% (restaurant consumption) applies.

Derogation 4: Short-term rental#

A French provider renting a car or boat to a non-taxable private person for ≤30 days is taxed at the place of delivery of the vehicle, not the provider's establishment location.

Example: a Paris car rental agency leases a Peugeot to a British tourist for 5 days. VAT is due in France (at place of delivery / handover in Paris). No UK VAT.

Pitfall 1: confusing « taxable recipient » with « France-registered client »#

A « client registered in France » is not a recipient taxable in another State. Only a valid intra-community VAT number, issued by another Member State, qualifies a client as B2B.

A French client holding a FR...XX number is a French taxable client: the service is taxable in France (even if the service is pitched as international).

Pitfall 2: omitting reverse charge notation#

We observed an SME invoicing zero VAT but without « reverse charge » notation. The client (German taxable) rejected the invoice as it appeared erroneous. The tax authorities subsequently demanded French VAT retroactively, despite the correct regime having been applied.

Pitfall 3: accepting an intra-community number without verifying it#

Some audit firms accept an intra-community VAT number « ITXXXXXXXX » on faith of a simple document copy. Yet this number may be fake or revoked. Using VIES.EU or each country's official VAT verifiers (e.g., Italian, German) takes 5 minutes and prevents 50,000 € assessments.

Pitfall 4: overlooking « restaurant » derogations#

A Paris hotel chain selling on-site catering services to a non-taxable client (corporate event organizer) forgets that the « restaurant consumption » derogation applies. It invoices zero VAT (believing it's B2B). Error: it's a B2C derogation, France VAT 5.5% is due.

Pitfall 5: confusing OSS with exemption#

OSS does not exempt you from VAT. It's a single filing window allowing you to pay VAT outside France for your non-taxable clients. If you sell to 100 non-taxable clients across 20 different countries, OSS spares you registering in 20 countries — but you still owe VAT to each of them, at that country's rate.

Verification of intra-community VAT numbers#

In 2026, fraud via fake VAT numbers persists. Before each significant B2B EU contract, validate the number via an official third party (EU VIES system).

DSN and DES declarations synchronized#

Many firms file DES correctly with Customs but forget to reconcile it with the CA3 (monthly VAT return). A mismatch in figures can trigger audit.

VAT regime shift for electronic services#

In 2026, if you sell electronic services to EU private individuals, the OSS regime is advised. Registration costs 0 €, but spares you later assessments (sales via platform, software, streaming).

Recently, a Paris consulting firm consulted us for complete review of its international invoicing. Over 3 years, it had invoiced 500 EU taxable clients « zero VAT ». However:

• 30% of invoices had no reverse charge notation → tax risk
• 12% of intra-community numbers were invalid (e.g., revoked previous year) → French VAT owed
• DES filings were late 8 of 36 months → customs penalties

After audit, we regularized 18 months of missing DES and arranged payment plan with Customs. Total cost: 45,000 € (instead of 180,000 € in full assessment).

This story shows B2B/B2C doesn't improvise. Every firm exporting services must document its processes (number verification, required notations, DES calendar) and audit annually.

1. Do you have EU-taxable clients? Verify their intra-community numbers now via VIES.
2. Do your invoices include « reverse charge » notation and both parties' VAT numbers?
3. Have you filed DES for these clients? Check the calendar (10th business day of following month).
4. Do you sell electronic services outside France? Consider OSS (free quarterly filing).
5. Verify CA3 / DES synchronization: net amounts must match.