Value added tax (TVA in France) touches almost every purchase, yet many professionals still work it out by hand and risk using the wrong rate or mixing up the net and gross price. This guide sets out the rates that apply in 2026, explains how to move from net (HT) to gross (TTC) in both directions, and shows how VAT sits alongside your trading margin.
The four VAT rates in 2026
France applies four VAT rates in metropolitan France, unchanged in 2026 according to the official guidance on service-public.gouv.fr (reviewed July 2026). Corsica and the overseas territories apply different rates. The four metropolitan rates are:
- 20 percent, the standard rate. The default. It covers the large majority of goods and services: electronics, clothing, consulting work, cosmetics and personal hygiene products.
- 10 percent, the intermediate rate. Catering, passenger transport, renovation work on older homes, and medicines that are not reimbursed.
- 5.5 percent, the reduced rate. Basic foodstuffs, books, gas and electricity subscriptions, equipment for disabled people, and sanitary protection.
- 2.1 percent, the special rate. Medicines reimbursed by the Sécurité sociale (state health system), the press, and a few specific cases.
The correct rate depends on the product, not the seller. A single shop can charge 20 percent and 5.5 percent on the same receipt. When in doubt, the applicable rate is listed in the Bulletin officiel des finances publiques (the official tax bulletin).
Going from the net price (HT) to the gross price (TTC)
The net price (HT, hors taxe) is the amount before VAT, the figure you use to work out your margin. The gross price (TTC, toutes taxes comprises) is what the customer pays. To add VAT, multiply the net by one plus the rate:
- Net of 100 euros at the standard rate: 100 multiplied by 1.20, which is 120 euros gross, of which 20 euros is VAT.
- Net of 100 euros at the reduced rate: 100 multiplied by 1.055, which is 105.50 euros gross, of which 5.50 euros is VAT.
The reverse is just as common: you know a displayed gross price and you want the VAT share. Here you have to divide, not subtract the percentage. A price of 120 euros gross at the standard rate works out as 120 divided by 1.20, which is 100 euros net and 20 euros of VAT. Taking 20 percent off the 120 euros instead would give 96 euros, a wrong result that shows up often in rushed quotes. The National Calculators VAT calculator handles both directions automatically, at whatever rate you pick.
Conversion table for 100 euros at each rate
The table below runs both operations on a 100 euro amount, one way then the other. On the left, 100 euros net with VAT added; on the right, 100 euros gross with the VAT pulled back out. For any other amount, keep the same multipliers and divisors.
| Rate | 100 euros net gives gross | of which VAT | 100 euros gross gives net | of which VAT |
|---|---|---|---|---|
| 20% | 120.00 | 20.00 | 83.33 | 16.67 |
| 10% | 110.00 | 10.00 | 90.91 | 9.09 |
| 5.5% | 105.50 | 5.50 | 94.79 | 5.21 |
| 2.1% | 102.10 | 2.10 | 97.94 | 2.06 |
This shows why you have to divide when going from gross back to net: at 20 percent, the VAT inside 100 euros gross is 16.67 euros, not 20, because it is worked out on the 83.33 euro net price rather than on the displayed figure.
Output VAT and deductible VAT
For a business, VAT is in principle neither a cost nor a gain: it passes through. You collect VAT on your sales and you deduct the VAT you paid on your business purchases. Each month or each quarter you remit to the tax authority the difference between collected VAT and deductible VAT. If your taxed purchases exceed your sales over the period, you receive a VAT credit.
Very small businesses under the franchise en base (small-business VAT exemption) do not charge VAT and do not recover it, as long as they stay below the turnover thresholds. For 2026 these thresholds are unchanged: 85,000 euros for the sale of goods and for accommodation services, with a tolerance threshold of 93,500 euros, and 37,500 euros for the supply of services, with a tolerance of 41,250 euros. The single 25,000 euro threshold for all activities, provided for by the 2025 finance law, was finally abandoned, so these two separate ceilings still apply. Once the tolerance threshold is crossed, VAT becomes due from the first day of the month in which the turnover goes over.
VAT and margin: keep them apart
VAT is calculated on the selling price, whereas your margin is calculated on your costs. A trader who buys an item for 50 euros net and resells it at 70 euros net makes a gross margin of 20 euros net, which is a margin rate of 28.6 percent on the selling price, or a markup rate of 40 percent on the cost. The 20 percent VAT is then added on top of the net selling price to give the price the customer pays, without changing the margin. Keeping the two lines of reasoning separate stops you believing that a 20 percent discount cancels the VAT, which it does not.
For purchases from abroad, also think about exchange rates. A supplier invoicing in dollars or pounds is easier to compare after conversion: the currency converter gives the amount in euros from the European Central Bank reference rates, on which you then apply import VAT.
Frequently asked questions
What is the standard VAT rate in France in 2026? The standard rate stays set at 20 percent. It applies by default to all goods and services that do not fall under a reduced rate provided for by law.
How do I strip VAT out of a gross amount? Divide the gross amount by one plus the rate. At 20 percent, divide by 1.20; at 10 percent, by 1.10; at 5.5 percent, by 1.055. The VAT share is the difference between the gross and the net you obtain.
Can a product have more than one rate? No, each product falls under a single rate, but the same basket can mix items at 20 percent, 10 percent and 5.5 percent. The invoice breaks down VAT by rate.
Does the franchise en base exempt you from VAT? Yes. Under this scheme you do not charge VAT and do not deduct it, as long as your turnover stays below 85,000 euros for the sale of goods or 37,500 euros for the supply of services (2026 thresholds, unchanged). Once you pass the tolerance thresholds of 93,500 euros and 41,250 euros, VAT applies.
The rates and rules quoted come from service-public.gouv.fr and impots.gouv.fr. This article is for general information and does not constitute tax advice.