Value-added tax (VAT) is an important issue for nonprofit organisations (associations), as associations – governed by France's 1901 "Law of Associations" – can be fully liable for VAT, often without even realising it. France has about 1.6 million active associations with a total estimated annual budget of over €113 billion, about 65% of which comes from revenue generated by their activities. Whenever an organisation provides services, sells tickets, or charges for training, VAT affects both its advertised pricing and its cash flow. It's therefore not the "association" status itself that grants a VAT exemption, but rather the nonprofit nature of the activities being carried out.

This article explains what you need to know about VAT as it applies to associations in France, including instances where they're subject to or exempt from VAT, the applicable rates, and the procedures for filing VAT returns.

Key takeaways

• Nonprofit organisations (associations) are not automatically exempt from VAT. Their tax status depends on how they're managed, the nature of their activities, and the conditions under which those activities are carried out.
  
• Revenue from ancillary for-profit activities is exempt from VAT up to €81,051, if the association operates under nonprofit management and the majority of its activities are not for profit.
  
• Some types of revenue qualify for VAT exemptions, including certain member services, up to six fundraising events per year, certain training programmes, as well as donations and membership dues for which no direct benefit is received in return.
  
• A taxable association might still qualify for the basic VAT exemption regime, meaning it doesn't have to invoice VAT if its revenue remains below the applicable threshold.
  
• Once an association becomes liable for VAT, it must apply the correct tax rate, comply with invoicing and reporting requirements, and clearly distinguish between its taxable and exempt activities.
  

Are associations subject to VAT?

Associations are not subject to VAT as long as they're managed on a nonprofit basis and do not conduct for-profit activities. However, "association" status alone does not suffice; the tax authorities assess VAT liability on an activity-by-activity basis. An activity deemed to be profit-making could nevertheless qualify for a VAT exemption if it falls below a certain monetary threshold.

There are three steps to determine whether an association is subject to VAT:

• Nonprofit management: Associations must be managed by volunteers (although they can be paid up to three-quarters of the minimum wage) and cannot distribute profits, directly or indirectly. Failure to meet these requirements renders the association liable for commercial taxes, including VAT, with no further review.
  
• Competition with for-profit businesses: If there's no competition, the association is exempt from VAT. If there is a comparable offering on the market, the tax authorities perform an assessment using the "4P" rule (product, public, price, and promotion); the product and the public (audience) carry the most weight.
  
• For-profit ancillary activities: If the association is exempt from business taxes for falling below a certain monetary threshold, it does not pay VAT, corporate income tax, or local business tax (territorial economic contribution, CET). This exemption is not optional: as soon as the necessary conditions are met, it applies automatically.
  

Which associations are subject to VAT?

Associations can be subject to VAT if they conduct for-profit activities that are not exempt – particularly if they operate under for-profit management or conditions comparable to those of a commercial enterprise. If an association exceeds the threshold for income from ancillary for-profit activities, it loses its commercial tax exemption on that income. However, its majority nonprofit activities continue to be exempt.

Here are the main cases in which associations are subject to VAT:

• For-profit management
  Associations operating under for-profit management – for instance, if a director's pay exceeds the allowable threshold – are automatically subject to VAT.

• For-profit activities
  Associations conducting activities deemed for-profit under the 4P rule are subject to standard VAT rules for those activities, with exceptions for applicable threshold exemptions. If the majority of an organisation's activities are for-profit, then all activities are taxable.

• Income in excess of exemption thresholds
  Associations whose income from ancillary for-profit activities exceeds €81,051 for the calendar year lose their VAT exemption. Such revenue then becomes subject to standard VAT rules, unless another exception or the basic VAT exemption applies.

• Hospitality
  Associations that operate bars or concessions or offer room and board are not eligible for the exemption on services provided to members; they're subject to standard VAT rules on these activities.

• Waiver of the basic VAT exemption
  Associations that fall under the VAT exemption threshold can choose to waive the exemption and pay VAT. This option can be advantageous if a major investment entitles an association to a tax deduction.

Which associations are exempt from VAT?

Associations are exempt from VAT if they operate under nonprofit management, the majority of their activities are not for profit, and revenue from their ancillary for-profit activities does not exceed €81,051. Several exemptions specific to the nonprofit sector could apply, regardless of total revenue.

Here are the main cases in which associations are exempt from VAT:

• Nonprofit activities
  Purely nonprofit associations are exempt from VAT on all of their statutory activities.

• Services to members
  Associations that offer sports, educational, cultural, or social services to their members are exempt from VAT, as are ancillary sales to members in amounts up to 10% of total revenue.

• Charitable events
  Associations operating under nonprofit management can claim exemptions on income from up to six charitable or fundraising events per year (e.g., raffles, carnivals, galas), with no cap on the amount.

• Revenue below the exemption threshold
  Associations whose revenue from profit-making activities remains below €81,051 are exempt from business taxes. This amount does not include the exemptions on six charitable events or income from assets (e.g., rent for an unfinished building).

• Activities Exempt by Nature 
  Associations conducting activities that are exempt by nature – such as professional continuing education covered by a tax certificate provided for this purpose – remain exempt, regardless of revenue.

• Low revenue
  Associations subject to VAT whose revenue remains low qualify for the basic VAT exemption. The thresholds are €85,000 for goods and €37,500 for services. If an organisation exceeds these thresholds during the year, it does not become subject to VAT until 1 January of the following year, as long as revenue does not exceed the higher thresholds of €93,500 and €41,250, respectively. Beyond these amounts, the exemption ceases as of the date the thresholds are exceeded.

• Donations and grants
  Donations, operating grants, and membership fees (where no specific benefit is provided in return) fall outside the scope of VAT. Only grants that supplement the price of a taxable transaction or serve as payment for a specific service are subject to VAT.

What is the VAT rate for an association?

Associations that owe VAT apply the same rates as businesses: the normal rate of 20%, the intermediate rate of 10%, the reduced rate of 5.5%, or the super-reduced rate (or special rate) of 2.1%, depending on the transaction type. The applicable VAT rate depends on the goods or services being sold.

In practice, associations often apply multiple VAT rates in the same month. For example, a football club that sells tickets, jerseys, food, and beverages needs to apply three different rates:

• Alcoholic beverages: The normal rate of 20% applies.
  
• Food for dine-in or takeaway and non-alcoholic beverages served by the glass: The intermediate rate of 10% applies.
  
• Sporting event tickets: The reduced rate of 5.5% applies.
  

What happens if an association conducts both VAT-exempt and VAT-subject activities?

If an association conducts both VAT-exempt activities and taxable activities, it becomes partially subject to VAT. It collects VAT only on its taxable activities and can deduct VAT on its purchases only to the extent that those purchases are allocated to a taxable activity. Therefore, it must distinguish between the two activity types and calculate a deduction coefficient for each expense.

This segmentation is mandatory. Appendix II, Article 209 of the General Tax Code (CGI) requires that activities subject to different VAT rules be accounted for in separate categories, or sectors. Each sector functions as an independent entity: VAT on purchases made for the taxable sector is 100% deductible, whereas VAT on purchases for the exempt sector is not.

In the case of mixed expenses that serve both sectors (such as rent for the association's headquarters, management software, or fees for an accountant), VAT is deducted on a pro rata basis by applying a deduction coefficient equal to the product of the liability coefficient, the taxation coefficient, and the eligibility coefficient (i.e., deduction coefficient = liability coefficient x taxation coefficient x eligibility coefficient). The taxation coefficient is calculated for each expense by dividing the revenue eligible for VAT deduction by the total revenue from transactions subject to VAT (excluding certain items, such as non-taxable grants).

For example, let's say a football club charges VAT on its jerseys, but not on its membership dues:

• Taxable activities: Jerseys purchased for resale are used solely for the taxable activity. Their VAT is therefore 100% recoverable.
  
• Exempt activities: Membership dues fall into the category of exempt activities, so no VAT is collected. The VAT on purchases specifically related to these dues is therefore not recoverable.
  
• Mixed activities: Rent for office space and accountant fees relate to both sectors of activity. For these expenses, VAT is deductible on a pro-rata basis.
  

What are an association's VAT obligations?

Taxable associations must register their activity with the corporate tax office (SIE), issue invoices containing the mandatory information, and file and pay taxes. As of 1 September 2026, they must also be able to receive electronic invoices, even if they qualify for the basic VAT exemption.

Here are the main obligations of associations subject to VAT:

• SIE registration
  An association must report its for-profit activity to the SIE within one month of exceeding the earnings threshold. It needs to obtain an establishment directory identification system (SIRET) number as well as an intracommunity VAT number.

• Compliant invoicing
  Every invoice issued by an association must include the VAT rate applicable to the goods or services being invoiced and, for each rate, the pre-tax total and corresponding VAT amount. Invoices must also include intracommunity VAT numbers when required. For associations operating under the basic VAT exemption regime, invoices must include the notice "TVA non applicable, article 293 B du CGI," which translates to "VAT not applicable, Article 293 B of the CGI." This reference is set to become "Article L. 233-3 of the CIBS" (Code of Taxation on Goods and Services) following the recodification of VAT regulations, which has been postponed until 1 January 2027.

• Electronic invoicing
  As of 1 September 2026, taxable associations – even those operating under the basic VAT exemption regime – must be able to receive electronic invoices via an approved platform. For these entities, the issuance of electronic invoices will become mandatory as of 1 September 2027.

How do associations declare VAT?

An association liable for VAT can file its VAT return online by logging into its business portal on impots.gouv.fr and filing a CA3 declaration form. The association reports the VAT collected on its taxable transactions and the VAT deductible on its purchases, then pays the outstanding balance.

The applicable VAT regime depends on the association's revenue:

• Normal regime: Under this regime, the CA3 return is filed monthly. Quarterly filing is permitted upon request, as long as the VAT due for the year remains below €4,000.
  
• Simplified regime: This regime, based on two advance payments and an annual CA12 return, is being eliminated on 1 January 2027, at which point the affected associations will switch to the CA3 return. Returns are filed quarterly if the revenue, plus taxable acquisitions, does not exceed €1 million in the previous year and €1.1 million in the current year; it's filed monthly if these thresholds are exceeded. Monthly filings are an option at any revenue level.
  

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FAQs about VAT for associations in France