France's recodification of VAT legislation into the new Code des Impositions sur les Biens et Services (CIBS) from 1 September 2026 will maintain existing procedures for VAT recovery on irrecoverable debts, according to administrative guidance published in February 2026.
VAT Recovery Framework
Under Article 272 of the Code Général des Impôts, suppliers can recover VAT previously collected and remitted when debts become definitively irrecoverable. The recovery mechanism applies differently depending on whether the business operates under the VAT on invoice basis or cash accounting regime. For suppliers under the standard VAT on invoice regime, VAT becomes due at delivery or invoicing regardless of payment timing, requiring formal rectification procedures when debts prove irrecoverable. Cash accounting businesses face no recovery issues as VAT liability only arises upon payment receipt.
Recovery requires proof that debts are definitively irrecoverable rather than merely overdue. Acceptable evidence includes failed court proceedings, judicial liquidation judgments, or insurance indemnity payments following unsuccessful recovery actions. Simple non-payment at due date, regardless of cause, does not qualify for VAT recovery.
Rectification Requirements
Suppliers must deliver rectified invoice duplicates to defaulting customers, marked with specific statutory language stating the unpaid amounts and VAT non-deductibility reference. As an administrative simplification, businesses may substitute individual duplicates with comprehensive statements listing all unpaid invoices, provided each entry includes invoice details, amounts, and required statutory warnings. Copies must be retained for audit purposes and produced upon tax authority request.
CIBS Transition
The September 2026 recodification transfers VAT provisions from the Code Général des Impôts to the new CIBS without substantive changes. Existing administrative guidance remains opposable to tax authorities until updated CIBS-specific documentation emerges. References to Article 272 CGI on invoices remain acceptable through 31 December 2027, providing transition flexibility for ongoing cases.
The recodification coincides with mandatory electronic invoicing implementation for all French VAT-registered businesses, though no specific guidance addresses interaction between bad debt recovery procedures and electronic invoicing requirements.
