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

The livre de police is the register French law requires from any professional who buys and resells second-hand vehicles (Penal Code, art. 321-7). Every purchase is entered daily: order number, seller's identity and ID document, vehicle description, price and method of payment. Retention is 5 years on paper, 10 years electronically. Breach: a 30,000 euro fine.

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 whose business includes selling used vehicles from their fleet, the statutory test being the activity of selling second-hand goods, not the legal form
• 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): useful in practice, the regulatory description being the make, the type, the serial number within that type (12 digits) and the colour
• Registration number: useful for stock tracking, not required by the texts
• Colour of the vehicle (order of 15 May 2020, annex I)
• Mileage at time of purchase: useful as evidence, not required by the texts
• Year of first registration: same status, good practice rather than a regulatory requirement

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#

• Order number assigned to each vehicle and marked on the item (Penal Code, art. R321-4)
• Transaction date (purchase or resale)
• Purchase price and method of payment, or the estimated market value for an exchange or a deposit (Penal Code, art. 321-7 and R321-5); the resale price is tracked in the accounts instead (Tax Code, art. 297 F)
• Vehicle condition description (good condition, accident history, etc.): useful in practice, without being required by the texts

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.

What the texts actually require#

The register covers acquisitions. Linking each resale back to its purchase is a tax requirement instead: the margin is determined item by item (BOI-TVA-SECT-90-20-20).

Paper register#

• Maintained daily, in indelible ink, with no blanks, erasures or abbreviations (Penal Code, art. R321-6), on non-removable pages (order of 15 May 2020)
• Initialled and paged (coté et paraphé) by the police commissioner or, failing that, by the mayor of the municipality where the establishment is located (Penal Code, art. R321-6), with a separate register for each point of sale; professionals without fixed premises apply to a police commissioner or a mayor
• 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.). Keeping the register through automated processing removes the need for a physical initialled and paged register, provided the system guarantees the integrity, intangibility and security of the recorded data (Penal Code, art. R321-6-1). The requirements are set nationally by the order of 15 May 2020: compliance with the ISO 14641-1 standard and logging of every consultation (user ID, date, time, purpose), kept for one year.

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 was supplied by a person not liable for VAT, or by a person not entitled to charge VAT on that supply (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 of 0.20% per month, i.e. 2.40% per year (Tax Code, art. 1727, III), and penalties of 5% to 80%
• Challenges to declared margin in income calculations

Case type (illustrative example): a garage buys a sedan for €12,000 and resells it for €15,000. The €3,000 margin is a VAT-inclusive margin: VAT is computed within it, i.e. €3,000 × 20/120 = €500. If the register is deficient, the sale is taxed on the full price, itself VAT-inclusive: €15,000 × 20/120 = €2,500, i.e. €2,000 of additional VAT.

The four questions that come up in an audit#

The Penal Code does set precise periods: a paper register is kept 5 years from its closing date (art. R321-6) and the data of a register held through automated processing 10 years from the date of recording (art. R321-6-1). Further periods apply:

• Tax retention period: 6 years from the date of the last transaction recorded in the books or registers, or from the date the documents were drawn up (Tax Procedure Code, art. L102 B)
• Civil limitation period: the general period is 5 years, both for personal or movable property claims (Civil Code, art. 2224) and for obligations arising in the course of trade (Commercial Code, art. L110-4)
• Accounting retention period: 10 years for accounting documents and supporting vouchers (Commercial Code, art. L123-22)

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

Each period and its legal basis#

In practice the longest period governs: keeping an electronic register for 10 years also satisfies the tax and accounting deadlines.

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: confiscation, closure of the establishment, a ban on the activity in or on the occasion of which the offence was committed, publication of the judgment. Article 321-12 refers only to subparagraphs 2, 4, 5, 6, 7, 8 and 9 of article 131-39: neither winding-up nor placement under judicial supervision

What increases the risk in practice#

• 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 to a return to a paper register that is initialled and paged.

• ✓ Register identification: paper register initialled and paged, or a compliant automated processing system (Penal Code, art. R321-6-1)
• ✓ Each entry: order number, make, type, serial number within the type, colour
• ✓ 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: 5 years for the paper register, 10 years for the data of an electronic register
• ✓ Internal controls: periodic review of entry completeness

The register holds sensitive personal data: the seller's identity, address, ID type and number. Keeping it is therefore subject to GDPR. The legal basis is a legal obligation (the register is imposed by the Penal Code), which removes the need for consent but not the other obligations: a limited purpose (traceability of second-hand goods, not marketing), a regulated retention period (it is not a matter of choice: art. R321-6-1 of the Penal Code sets 10 years for the data of an electronic register, and the order of 15 May 2020 requires every consultation to be logged, that log being kept for one year), security and restricted access (paper register under lock, protected electronic version, access limited to authorised staff), and informing data subjects. A register compliant with the Penal Code but careless on GDPR exposes the business to a second, separate sanction before the data-protection authority (CNIL).

The register lives up to its name: it is first intended for law enforcement. On immediate presentation, it can be consulted by the police and gendarmerie (combating receiving and vehicle theft, the register's historic purpose), the tax authority (validating the VAT margin scheme under art. 297 A), the customs authorities and the DGCCRF (consumer protection and transparency): art. R321-1 of the Penal Code requires the receipt of prior declaration to be produced at the request of the police and gendarmerie, the tax authorities, customs and the consumer protection and fraud control services. The register must be presentable without delay at the place of business. Producing the register is not left to the court's discretion: article 321-8 of the Penal Code punishes both false entries in the register and a refusal to produce it to the competent authority with up to six months' imprisonment and a EUR 30,000 fine. A register kept off-site and unavailable during an inspection therefore carries the same maximum penalty as a failure to keep one, hence the value of a secure electronic solution available at any time.

The obligations that surround the register#

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.