Factoring Operations

In a Decree dated September 29, 1994, the Tax Administration gave some precision related to the VAT regime applicable to factoring operations.

This Decree sets as a rule the case law of the Supreme Court ("Conseil d'Etat") which stated that the due date of a tax linked to services is the date when the debt is actually paid by the debtor and not the booking date, in the current accounts of the member, of the sums corresponding to the settlement of the invoices issued by the invoicer (CE, July 27, 1984, nø 29-388).

It also provides for the modalities of recovery of the VAT collected for an unsettled operation.

It may be reminded that the factoring system requires the intervention of three parties: