The french VAT is applicable on all the deliveries of goods made on the french territory. Until January 2023 the output VAT was due when the goods are delivered to the customer (and the sale invoice is raised).

Starting January 2023 the law has changed about the exigibility of the output VAT on goods delivery. If the company wants to collect a down payment from the customer before the delivery of the goods the output VAT should be applied on the down payment and paid to the french tax authorities.

The result is an anticipation of the payment of the output VAT (cash impact).

In order to be able to declare the output VAT on the down payments received the companies will also need to change their invoicing process. Until 2023 the companies could collect down payments without the obligation to raise a sale invoice. Since January 2023 it will be mandatory to raise a sale invoice when collecting a down payment and to apply the output VAT on it. This will allow the declaration and payment of the VAT to the authorities.

NB : changing the invoicing process should not change the accounting revenue recognition (revenue booked when the goods are delivered to the customer).

This change has two major impacts on the french companies (cash and invoicing process) and should be anticipated to ensure french tax compliance