France updates VAT rules to clarify taxation of mixed goods and services.
The French Tax Authorities issued new administrative guidelines regarding the VAT treatment of composite supplies in transactions involving a mix of goods and services on 14 May 2025.
These updates follow changes introduced by the 2021 Finance Act and a public consultation held in August 2023.
The guidelines explain when separate elements of a transaction should be treated as a single supply for VAT purposes. This is important for ensuring consistent taxation and preventing the artificial splitting of transactions that serve one main economic purpose.
Other key topics covered include definitions of composite supplies, determining whether supplies are independent or connected, and applying VAT when different parts fall under separate tax regimes.
The guidance addresses complex cases, such as bundled insurance or financial services, packaging, public procurement, and access to certain services. It also explains the VAT treatment of services that qualify for reduced rates.
