French businesses that sell goods outside of the EU do not invoice value-added tax (VAT). But this exemption is not automatic. Businesses must show customs documents to prove their goods have physically left EU territory.

It is very important for businesses to comply with this requirement. For example, French exports rose by 2.5% year over year to €614.7 billion in 2025. In addition, businesses that use unjustified export VAT exemptions can be subject to VAT reassessment at the applicable rates. They might also have to pay a large amount of penalty interest.

In this article, we explain export VAT rules, including the countries and territories affected, exempt and taxable transactions, penalties, invoicing, and filing requirements.

Key takeaways

• Exports are exempt from French value-added tax (VAT), as long as businesses can show the right customs documentation to prove their goods have actually left EU territory.
  
• The exemption does not apply to all transactions. Temporary exports are subject to a separate regime, while an improper tax exemption or lack of proof of export can result in taxation in France.
  
• Exports must be properly declared. They are reported as nontaxable transactions and are subject to new e-reporting requirements. The filing schedule depends on the size of the business.
  
• The invoice must clearly justify the value-added tax (VAT) exemption and be consistent with customs data. Businesses can reference Article 262, Section I of the General Tax Code (CGI) to claim the exemption.
  
• Primary proof of shipment occurs when the export declaration shows “exit” status. This is equivalent to an exit certificate.
  

What is export value-added tax (VAT)?

Export VAT refers to the regime applicable to goods shipped outside of the EU. These sales are exempt from French VAT. Businesses invoice before tax and recover the VAT on their purchases, as long as they can prove the merchandise actually exited the country.

This VAT exemption differs from exemptions that take away a business’s right to deduct VAT. Examples include the domestic exemptions listed in Article 261 of the General Tax Code (CGI). Exporters do not collect taxes on their sales outside of the EU, but they do recover the VAT charged by their suppliers, carriers, and service providers. However, VAT is still charged in the country where the goods are consumed.

In France, the export VAT exemption is found in Article 262, Section I of the CGI. Subsection 1 lists goods shipped outside of the EU by sellers or on their behalf. Subsection 2 covers goods shipped by buyers not based in France. Intracommunity delivery is governed by Article 262 ter, Section I of the CGI and grants the same right to deduct VAT.

Which countries and territories are affected by export VAT?

The export VAT exemption covers all countries located outside of the EU, including the UK, Switzerland, and the US. It also applies to certain member state territories excluded from the EU’s tax jurisdiction. France’s overseas regions and departments are also treated as export territories for goods shipped from mainland France.

Third countries include Norway and Iceland, which are members of the European Economic Area (EEA). Since Brexit, sales to Great Britain are also considered exports. However, the exchange of goods with Northern Ireland follows intra-European rules.

VAT is also not applied in some areas of member states that are excluded from the EU’s tax jurisdiction, such as the Canary Islands and the Channel Islands. Deliveries to these regions fall under the export regime.

Under Article 294 of the CGI, shipments of goods from mainland France to Guadeloupe, Martinique, La Réunion, French Guiana, and Mayotte are considered exports. The same is true for goods shipped to other overseas communities and territories.

Which exports are exempt from VAT?

French businesses are entitled to VAT exemptions for deliveries of goods that show proof of exit from the EU, zero-rated sales confirmed by customs, free shipments, equipment transfers, and certain services directly linked to exports. Some exporters can also purchase VAT-free goods intended for export.

Here are the main export transactions that are exempt from VAT.

Deliveries of exported goods

Article 262, Section I of the CGI covers goods shipped by sellers, as well as those taken out of the country by buyers who are not based in France. An Ex Works (EXW) delivery is allowed if the sale is immediately and directly intended for export.

Sellers enter each shipment into their accounting records by date. They also include the quantity of packages and package numbers, as well as the nature, value, and destination of the goods. Sellers also keep proof of exit, and this information is referenced on the corresponding invoices.

Zero-rated sales to travelers

A traveler living outside of the EU recovers VAT on their purchases if the purchase totals exceed €100 after tax in a single store on a single day. The exemption is not final until they receive a slip stamped by customs or an electronic stamp. The goods must exit the EU before the end of the third month following the sale.

Free shipments and equipment transfers

Free shipments (e.g., gifts, giveaways, and samples) are exempt under the same conditions as sales. The same is true for equipment exported without notification of intended return and used abroad for business purposes. For example, this could be equipment used on a public works site. However, equipment that will be returned is considered a temporary export.

Services directly linked to exports

Some transport and intermediary services—such as delivery to a port or transshipment airport or a feeder transport to the destination country—are exempt when they meet the conditions of Articles 262 and 263 of the CGI.

VAT-free purchases

In addition to these exemptions, some exporters have the option to purchase VAT-free goods intended for export. In that case, they must submit a certificate to their suppliers and not exceed an annual quota.

Which transactions are not exempt from export VAT?

Some transactions are not exempt from VAT. These include temporary exports, sales of goods taken out of the country by customers and used to equip private means of transport, and out-of-scope, zero-rated sales. A delivery with no proof of exit from the EU is reclassified as a domestic sale and is taxable at the rate applicable to that particular good.

Here are the main transactions that are not eligible for the exemption on permanent exports.

Temporary exports

Based on administrative doctrine, goods shipped outside of the EU temporarily with an intended return are excluded from the permanent export regime. This includes equipment used for demonstrations and at trade fairs. However, exclusion does not necessarily mean that French VAT is owed because the treatment depends on the type of transaction carried out.

Goods used to equip private transport

The VAT exemption does not apply to goods used to equip or provision recreational boats, private aircraft, or other means of transport for private use.

Out-of-scope, zero-rated sales

A purchase below the threshold, of a commercial nature, or involving tobacco, weapons, or cultural property is invoiced with VAT included.

Transactions with no proof of exit

French businesses that cannot provide supporting documentation lose the exemption. The sale is treated as a domestic transaction.

How to declare export VAT

Exports are declared at their pre-tax amount on the VAT declaration for nontaxable transactions. Under the normal regime, this means line E1 of Form 3310-CA3. No VAT is collected, but deductible VAT on purchases can still be recovered.

This is how businesses declare export VAT:

• Normal regime
  The pre-tax amount of the exports is reported on line E1 of Form 3310-CA3 using code 0032 for the delivery period. Invoices denominated in foreign currencies are converted into euros for reporting purposes.
  
• Simplified regime
  Exports are also recorded pre-tax under nontaxable transactions in the annual CA12 declaration (Form 3517-S-SD).
  
• Deduction and refund
  Exporting businesses accrue a VAT credit since they do not collect VAT on their sales but do deduct the VAT paid on their purchases. This credit is deducted from subsequent filings, or businesses can request a refund.
  
• Electronic data transmission
  Exports fall within the scope of international transaction e-reporting. They must be transmitted to the tax authority through an approved platform. This requirement has applied to large and intermediate-sized enterprises since September 1, 2026. It will apply to small and medium-sized enterprises (SMEs) and microbusinesses as of September 1, 2027.
  

How to invoice exports

An export delivery invoice must include the mandatory information, a pre-tax amount, and a reference to the law governing the exemption. One example is: “Exonération de TVA, article 262 I du CGI” (“Exempt from VAT, Article 262, Section I of the CGI”). Customs clearance and tax audits are easier when the international commercial term (Incoterm), currency, and destination country are included.

Here is the key information an export delivery invoice must contain:

• Mandatory information
  The invoice must include a unique number, issue date, parties’ identity and address, seller’s VAT number, description of the goods, and price before tax.
  
• Exemption notice
  Article 242 nonies A, Section I, Subsection 12 of Appendix II of the CGI requires that businesses cite the law on which the VAT exemption is based. Alternatively, the tax authority allows businesses to include an unambiguous statement about the nature of the transaction. For deliveries of exported goods, the usual notice is: “Exonération de TVA, article 262 I du CGI” (“Exempt from VAT, Article 262, Section I of the CGI”). Invoices for services located outside of France can use this phrasing: “TVA non applicable, 1° de l’article 259 du CGI” (“VAT not applicable, Article 259, Section 1 of the CGI”).
  
• Customs consistency
  If a business is audited, the quantities, value, and description of the goods must match the export declaration.
  
• Error correction
  An incorrect invoice is rectified by issuing a new invoice that supersedes the previous one but refers directly to it. A credit note is also allowed.
  

How to prove goods have exited the EU

French exporters can prove their goods have exited the EU with an electronic exit certificate issued by customs based on their export declaration. Article 74 of Appendix III of the CGI also allows alternative proof. This could be a transport document for a third country.

Proof of exit comes from the export declaration filed in Online Customs Clearance via Automated Processing (DELTA), which is the French customs authority’s online customs clearance service. Once the goods are shipped, the office of exit uses the European Export Control System (ECS) to notify the office of export that they have left the EU.

When the declaration is approved, customs issues a release note—which allows the goods to leave—and a Movement Reference Number (MRN), which identifies the shipment to the office of exit. These documents are not proof of exit because they are prepared before exit occurs. After shipment, exporters verify that their declaration shows “exit” status. This is equivalent to an exit certificate and serves as proof of exemption.

Note: For shipments by mail, the CN 23 customs declaration attached to the package is proof of export. An electronic certificate is also required for shipments worth more than €1,000. For low-value, low-weight commercial shipments, a commercial invoice stamped by the customs office can serve as proof.

What are the penalties for unjustified exemptions?

When exemptions from export VAT are not justified, the VAT that needed to be collected is reassessed. The sale becomes taxable in France at the rate applicable to the product in question (e.g., standard rate or reduced rate). Penalty interest of 0.20% per month is added to the reassessment.

When the parties have agreed to a price without VAT, the reassessment is calculated backward from the price, unless there is a clause that allows the seller to pass the extra charge on to the customer.

Also, Article 1729 of the CGI provides for a 40% increase in the reassessed VAT if the violation was intentional. This figure rises to 80% if there is fraudulent manipulation. Omitting mandatory information on the invoice is punishable by a fine of €15 per omission or inaccuracy. The total fine cannot exceed 25% of the invoice amount.

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FAQs about value-added tax (VAT) on exports in France