TLDR: Authors of intellectual works in France benefit from a specific VAT regime, including an exemption for low incomes or a withholding mechanism managed by publishers and collective management organizations. VAT invoicing is only mandatory if the author exceeds turnover thresholds or opts for the general regime.
VAT Exemption Regime
Authors of intellectual works automatically qualify for VAT exemption if their turnover does not exceed the thresholds set by Article 293 B of the French Tax Code (CGI). This exemption relieves authors from declaring and paying VAT, except for imports. Architects and software authors are not eligible for this exemption.
Withholding Mechanism
The withholding mechanism is a distinctive feature of the VAT regime for authors. Publishers, collective management organizations, and producers withhold the VAT due on royalties and pay it directly to the Treasury. Authors do not invoice VAT and have no specific accounting obligations, except for retaining royalty statements.
Invoicing Obligations
Authors must invoice VAT only if they exceed turnover thresholds or opt for the general regime. In such cases, they must issue invoices compliant with Article 289 of the CGI. If an exempt author invoices VAT without being required to, the VAT will not be deductible for the recipient.
Waiving the Withholding Mechanism
Authors can waive the withholding mechanism by notifying their decision to publishers, collective management organizations, and the tax authorities. This waiver is valid for five years, automatically renewable, and applies to all royalties received by the author.
Document Retention
Authors must retain royalty statements received from publishers, collective management organizations, and producers. These documents serve as proof of income and the correct application of the withholding mechanism. Exempt authors have no additional accounting obligations.
For informational purposes only; not personalized tax advice.