Vehicle registration book (livre de police): Legal obligation, required content, and retention

The livre de police (vehicle registration book, or register of used movable property) is a mandatory register maintained by professionals who regularly buy and resell second-hand vehicles. This obligation is established under Articles 321-7 et seq. of the French Penal Code, regulatory section (R321-1 et seq.).

This is strictly a criminal law requirement, and non-compliance carries serious penalties. The register also serves as decisive tax evidence: it determines whether a business can invoice using VAT on margin (Article 297 A of the French Tax Code) rather than VAT on the total selling price.

The following are subject to this obligation:

• Motor vehicle dealers (new and used)
• Repair shops and garages engaged in used vehicle resale
• Second-hand vehicle traders and specialist dealers
• Leasing companies (lease-to-own and long-term lease) if engaged in systematic resale
• Any professional whose business includes the regular purchase and resale of vehicles

Key point: the requirement attaches to habitual practice (regular buy-sell activity), not business structure. A garage that resells a vehicle asset occasionally remains subject to this rule if buy-sell forms part of its business scope.

The register must record for each transaction:

Vehicle details#

• Make and model
• Vehicle Identification Number (VIN)
• Registration number (old and new if changed)
• Mileage at time of purchase and resale
• Year of first registration

Buyer/seller details#

• Full identity (name, first name, SIRET if business)
• Identification document: type (national ID, passport, certificate of incorporation, etc.) and number
• Address (of the seller)

Commercial data#

• Transaction date (purchase or resale)
• Price agreed (purchase and resale prices)
• Vehicle condition description (good condition, accident history, etc.) – optional but recommended

Purchase-resale linkage#

The register must establish a link between the purchase transaction and the resale of the same vehicle, creating a complete chain of ownership and allowing traceability of holding periods and margins realized.

Paper register#

• Maintained daily, with no blanks, erasures, or overwriting
• Numbered and certified according to local regulatory authority procedures (gendarmerie, customs, or prefectural office depending on region) – specific procedures vary by jurisdiction
• Kept on-site or at an authorized storage location

Electronic or digitized register#

Permitted provided that integrity and unalterability are guaranteed (secure software, electronic signature, timestamp, etc.). Precise conditions follow local administrative guidelines.

Best practice: even with electronic records, maintain complete audit trails (modification tracking) to demonstrate good faith during inspections.

The livre de police is critical for tax purposes. Article 297 A of the French Tax Code allows professionals to invoice using VAT on margin (VAT paid only on the purchase-resale difference) when:

1. The used good originates from a non-VAT-registered person (individual, public authority, etc.)
2. The register proves this origin – absence or gaps may trigger requalification
3. Accounting and documentary requirements are met

An incomplete register (missing VIN, purchase price not recorded, seller not identified) exposes the business to:

• Requalification to VAT on total price (significant cash impact)
• VAT assessments plus late-payment interest (0.40% monthly) and penalties (5–80%)
• Challenges to declared margin in income calculations

Example: a garage purchases a sedan for €12,000 and resells it for €15,000. Using VAT on margin: 20% × €3,000 = €600 VAT. Using VAT on total price: 20% × €15,000 = €3,000 – an additional €2,400 if the register is deficient.

The Penal Code does not explicitly set a retention period. Prudent practice aligns with:

• Tax retention periods: 6 years general administrative review window, up to 10 years for in-depth audits
• Civil law periods: 10 years for automotive contract disputes
• Recommended practice: retain for a minimum of 5 to 10 years to cover primary risks (tax audit, litigation, compliance review)

After the retention period, controlled destruction (certified destruction, shredding) is recommended to protect personal data (seller identity, identification documents).

Failure to maintain a livre de police results in serious criminal sanctions under Article 321-7 of the Penal Code:

For an individual#

• Imprisonment: up to 6 months
• Fine: up to €30,000

For a legal entity (SARL, EIRL, SAS, etc.)#

• Fine: up to the quintuple amount, namely up to €150,000 (Article 131-38 of the Penal Code)
• Ancillary penalties possible: asset forfeiture, business closure, prohibition on operating, publication of judgment

Aggravating circumstances#

• Total absence of register
• Falsified, backdated, or misused register
• Register not produced during inspection
• Repeat offense

Important: these criminal penalties apply in addition to tax consequences (VAT assessments, additional charges, administrative penalties).

Case 1: The garage reselling an internal commercial vehicle#

A garage purchases a work van from a local business (non-VAT-registered) and resells it several months later. The register is mandatory to document the purchase and justify VAT margin treatment. Absence = risk of VAT reassessment plus criminal fine.

Case 2: Trade-in on sale#

A dealership accepts a trade-in from an individual as partial payment for a new vehicle. The register must record the purchase (date, trade-in price, seller identity, VIN) and track inventory or resale. The chain must be fully traceable.

Case 3: Partial gaps#

A register omitting the VIN or the seller's identity document number is incomplete. During a tax audit, the tax authority may challenge VAT margin for that specific transaction, demanding requalification to VAT on total price.

Case 4: Electronic register without audit trail#

Automotive management software allowing retroactive modifications without timestamps or audit trails creates risk. Preference should be given to comprehensive audit trails or return to a paper-based, numbered and certified register.

• ✓ Register identification: numbered and certified paper or securely protected electronic format
• ✓ Each entry: VIN, registration number, make/model, mileage
• ✓ Seller: full identity + document type + document number
• ✓ Buyer/receiver: identity + address
• ✓ Dates: day, month, year (no blanks or erasures on paper)
• ✓ Prices: separate purchase and resale prices
• ✓ Purchase-resale linkage: each vehicle identifiable from purchase through resale
• ✓ Retention: maintain for at least 5–10 years
• ✓ Internal controls: periodic review of entry completeness

The livre de police is not a mere administrative formality: it is a register that protects automotive professionals by documenting inventory origin and justifying VAT margin eligibility. Its absence exposes the business to:

• Serious criminal exposure: up to €30,000 individual fine or €150,000 corporate fine
• Tax requalifications: VAT on total price instead of margin, significant assessments
• Administration costs: disputes, litigation, reassessments

For automotive accountants, dealerships, and garages, register auditing should be a standard component of annual accounting oversight. A well-maintained register is solid evidence in the event of tax audit or dispute.

For further reading: see our articles on VAT margin for used vehicles, analytical accounting for garages, and the automotive collective bargaining agreement. For a complete audit of your automotive operations, contact our Paris accounting services.