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Lump-sum payments and VAT: the French tax authorities reiterate key principles

Lump-sum payments and VAT: the French tax authorities reiterate key principles

Published on : 17/12/2025 17 December Dec 12 2025
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In a recently published ruling, the French tax authorities commented on a supply-of-goods arrangement combining annual invoicing with monthly lump-sum payments not directly linked to actual deliveries.

Beyond the specific facts, this position provides a useful reminder of the fundamental VAT rules.

VAT chargeability: application of the general rule

For supplies of goods, VAT is in principle chargeable upon delivery, i.e. when the goods are physically handed over.
The specific regime applicable to supplies giving rise to successive statements or payments is strictly limited to supplies of a continuous nature (such as electricity, water or telecommunications). Repeated supplies of goods remain point-in-time transactions where no delivery schedule has been agreed.

Advance payments: a strict definition of a “VAT advance”
The tax authorities recall that VAT is chargeable on an advance payment only if it qualifies as a VAT advance (acompte). This requires that, at the time of payment:
  • the goods concerned are clearly identified, and
  • the completion of the transaction is not uncertain.
Failing this, the amounts paid merely constitute cash advances and do not trigger VAT chargeability.

Invoicing: mandatory deadlines
Each supply of goods must be invoiced no later than the end of the month in which VAT becomes chargeable.
An annual summary invoice covering deliveries already made during the year does not comply with VAT invoicing rules.
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