Providing services in France and invoicing abroad: how to reduce costs?

Professionals in France who do business internationally, whether within or outside the EU, often encounter invoicing challenges. Two questions frequently arise: Who pays the VAT? And how can bank fees be reduced when receiving non-SEPA transfers?

The VAT issue is quite complex and requires in-depth knowledge of tax regulations. In this article, we’ll provide the basics of invoicing for services from France, without going into excessive detail. This guide is written for English speakers living in France.

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What are the available solutions for invoicing services abroad?

Comparison of different payment methods

To get an idea of the fees for invoicing a service abroad, let’s imagine you’re invoicing a client located in the United States for a total amount of €5,000. As a service provider based in France, you will be receiving a non-SEPA transfer. The transaction requires both a money transfer and a currency conversion into euros.

The figures provided above are estimates and are subject to change at any time. Furthermore, they do not take into account the exchange rate that will be used for the transaction.

With most traditional banks, you’ll likely face a marked-up exchange rate, increasing the total cost of the transfer. With Wise, however, the mid-market exchange rate is used, and no correspondent fees are charged as it’s a local transfer.

What costs should be considered?

Transfer fees can be a tricky issue. As long as you are receiving money, you won’t encounter them. However, as soon as you need to pay for a service in a foreign currency, the transaction will incur surcharges. Here are the elements to consider:

• Exchange rate: Most traditional banks use a marked-up rate. If you send an amount X via a traditional bank, the amount debited from your account will likely be higher than if you made the transfer through a provider using the mid-market rate.

• Sending fees: These generally consist of a fixed component and a variable component that depends on the amount sent.

• Correspondent fees: These depend on the route the funds take between your bank and the recipient’s bank.

• Potential surcharge if you make the transfer through your local branch.

Services in France and invoicing abroad: VAT

The taxation of services is relatively complex. It depends on the location, the client’s and supplier’s status, and the type of services billed.

Value Added Tax (VAT) is always paid by the person purchasing a good or service. Therefore, if you sell a service, it is your client who will be responsible for paying VAT or not. As a supplier, it is your responsibility to know whether you need to charge VAT.

Before delving into the details, here are a few definitions. We refer to a “taxable person” (assujetti) as a professional who pays VAT. A “non-taxable person” (non-assujetti) is a private individual.

VAT for invoicing services within the EU

If your client is VAT-registered (i.e., a business) and located in another EU member state, you should invoice net of tax (HT - hors taxe). Your client will be responsible for self-assessing the VAT. If your client is in France, the service will be subject to French VAT.

Is your client not VAT-registered? In this case, the service is taxable in France.

Try our invoice templates to create an invoice easily.

Tax for invoicing services outside the EU

If you sell a service to a VAT-registered company located outside the EU, you will not have to charge French VAT. You should therefore invoice net of tax (HT) with the mention “auto-liquidation” (self-assessment).

If your client is not VAT-registered, they will be responsible for paying VAT upon import.

Special cases concerning taxation

The rule regarding the place of taxation is subject to a few exceptions. For example, if a travel agency sells services to taxable clients outside the EU, the rule would dictate that they pay the VAT. However, the law stipulates that the service will be subject to French VAT if the agency’s headquarters are located in France.

These special rules also apply to vehicle rentals, services related to real estate (works, expertise, cleaning, etc.), passenger transport, and ticketing for cultural events.

Therefore, there are rules to follow when invoicing services abroad, and we recommend always contacting the competent authorities for further advice. The information in this article is for guidance only.

Everything you need to know to understand your international invoice

Depending on your client’s status and location, you will need to adapt your invoice. Among the elements that must be included on the invoice are:

• The client’s intra-community VAT number.

• If the service is not taxable in France: a mention such as “self-assessment by the recipient, articles 44 and 196 of Directive 2006/112/EC of 28 November 2006” must be included. Please note that the specific article of law may vary depending on the service you provide. Consult the invoicing rules issued by the Directorate General of Public Finances (Direction Générale des Finances Publiques) for more information.

If you provide a service to a VAT-registered company located in an EU member state, you will need to submit an European Service Declaration (Déclaration Européenne de Service - DES) on the customs website.

Online alternatives for paying international invoices?

Wise offers a ready-to-use solution for professionals. It’s a multi-currency account that integrates with most accounting tools like Xero. You can hold 40+ different currencies.

With the Wise account for professionals, you can obtain 8+ different account details (EUR, GBP, USD, etc.).

Transfers can be made to 140+ countries worldwide. If you need to send money in a foreign currency, the conversion will be performed at the mid-market exchange rate, not at a marked-up rate (as is the case with most traditional banks).

Finally, the Wise card, linked to the account, allows you to make payments without hidden fees if you have the transaction currency in your account and no conversion is necessary. You can also withdraw up to €200 per month for free, with a maximum of 2 withdrawals.

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This article is a translation of the original article published in French and was translated within 365 days of publication. While the content has been translated for accessibility, the data and sources referenced have not been updated since the original publication date.