The French tax authorities have recently clarified in the BOI ACTU-2024-00213 published January 8, 2025 the conditions and procedures for correcting wrongly charged VAT, introducing a notable relaxation of the existing rules.
📌 Legal Framework Reminder
According to Article 283-3 of the French General Tax Code (CGI), if a supplier mistakenly charges VAT, the amount remains payable by the invoice issuer. Meanwhile, Article 271 II-1-a of the CGI says that the client cannot deduct this VAT if they have not received a compliant invoice.
However, correction mechanisms are now available under certain conditions to rectify this situation.
Regularisation Procedures
Requesting a Refund from the Supplier
If VAT has been wrongly charged, the client must first contact the supplier to obtain a refund of the corresponding amount. Only after this reimbursement can the invoice issuer proceed with the correction.
Timeframe for Correction
The correction of wrongly charged VAT can be made until 31 December of the second year (N+2) following the payment of the tax concerned.
Issuing a Corrective Invoice
The supplier must issue a rectified invoice, cancelling the incorrectly charged VAT, before being able to regularise the situation with the tax authorities.
New Deadline in the Event of a Tax Audit
The tax authorities also specify that if they challenge the VAT deduction during an audit, a new regularisation period will be granted to the client, preventing a permanent loss of the right to deduct VAT.
Key Takeaways:
A supplier who has wrongly charged VAT must first refund the client before carrying out a tax correction.
A corrective invoice is essential to rectify the VAT due.
The correction can be made until 31 December of the second year (N+2) following the payment.
A tax audit can open a new correction period for the client.
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