Construction subcontracting invoice — the VAT reverse charge
In the building and civil engineering sector, the VAT reverse charge applies where work is carried out by a SUBCONTRACTOR for a principal that is registered for VAT. The subcontractor does not charge VAT: it puts the wording "autoliquidation" on its invoice. It is the receiving business — the one that brought the subcontractor in — that pays the VAT directly to the tax administration, and that then charges VAT to its own client. The mechanism moves who is liable; it does not remove the tax. Two reporting consequences follow, and they are not symmetrical: the receiving business enters the amount excluding VAT of the services received on the "other taxable transactions" line of its VAT return, while the subcontractor enters its own on the "other non-taxable transactions" line. Forgetting to apply the reverse charge costs a fine of 5% of the deductible amount.
Up to date for 2026 — verified on September 11, 2026Official procedure, no printed formGuide: about 20 min
Deadlines
- When the invoice is drawn up
- The subcontractor does not charge VAT and puts the wording "autoliquidation" on its invoice: it is at invoicing that the mechanism takes effect.
- On the VAT return
- The receiving business enters the amount excluding VAT of the services received on the "other taxable transactions" line, while the subcontractor enters its own on the "other non-taxable transactions" line.
Documents to prepare
- The subcontracting contract, or failing that a quote, signed purchase order or document recording the agreement on the work and its price
- The nature of the work, to check that it falls within the reverse charge
- The principal's VAT status: the mechanism assumes a taxable receiving business
- The subcontractor's VAT regime, since the VAT-exempt small business scheme ("franchise en base") changes what the receiving business must pay
- The amount excluding VAT of the subcontracted services, to be entered on both VAT returns
No form is attached to this procedure: the link leads to the official page that describes it.
What this page gives you
The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.
Who this applies to
- Building and civil engineering subcontractors carrying out work for a principal registered for VAT
- Receiving businesses, which bring in a subcontractor to carry out part of the work: they are the ones who apply the reverse charge
- Every trade involved in renovating or constructing buildings
- Civil engineering and public works businesses
- Businesses fitting out buildings, carrying out repairs or restoration, and cleaning providers where the cleaning follows on from the work or is incidental to it
Worked example
Example: Électricité Dumas subcontracts for Bâtiments Pérez on a renovation site
Bâtiments Pérez, a main contractor registered for VAT, is renovating a building for a private client. It gives the electrical package to Électricité Dumas for €18,000 excluding VAT, and the link between the two is established by a subcontracting contract — failing that, a quote, a signed purchase order or any document recording their agreement on the work and its price would have done. Électricité Dumas invoices €18,000 WITHOUT VAT, carrying the wording "autoliquidation"; on its VAT return, that €18,000 goes on the "other non-taxable transactions" line, and it continues to deduct the VAT on its own purchases of cable and equipment. Bâtiments Pérez enters the same €18,000 on the "other taxable transactions" line of its return, pays the corresponding VAT to the administration, then invoices its final client with VAT in the ordinary way. Had Bâtiments Pérez forgotten to apply the reverse charge, it would have faced a fine of 5% of the deductible amount. And had Électricité Dumas been covered by the VAT-exempt small business scheme ("franchise en base"), Bâtiments Pérez would have had no VAT to pay to the administration on that subcontracting.
How to fill it in, step by step
- Check that the work falls within scope: construction of buildings and other immovable works, work by the various trades involved in renovation or construction, civil engineering and public works, fitting out buildings by incorporating movable goods, repair or restoration work putting a building back in order, and cleaning that follows on from that work or is incidental to it.
- Check that it really is SUBCONTRACTING: the work must have been entrusted to a subcontractor, and the principal must be registered for VAT.
- Establish the link between principal and subcontractor by a subcontracting contract or, failing that, a quote, a signed purchase order, or any other document recording the two businesses' agreement on the subcontracted work and its price.
- As subcontractor: invoice WITHOUT VAT and put the wording "autoliquidation" on the invoice.
- As subcontractor: enter those transactions on the "other non-taxable transactions" line of your VAT return, and carry on deducting the VAT on your own costs — not charging is not the same as not deducting.
- As receiving business: enter the amount excluding VAT of the services received on the "other taxable transactions" line of your VAT return, and pay the VAT to the administration.
- As receiving business: then invoice VAT in the ordinary way to your own client, the one who commissioned the work.
- Where the subcontractor is covered by the VAT-exempt small business scheme ("franchise en base"), pay no VAT to the administration on that subcontracting.
The form, line by line
- The wording "autoliquidation"
- The wording the subcontractor MUST put on its invoice, as the counterpart of charging no VAT. It is what shows an inspector why no tax was collected.
- "Other taxable transactions" line
- On the RECEIVING BUSINESS's VAT return: it enters there the amount excluding VAT of the services supplied to it that fall under the reverse charge.
- "Other non-taxable transactions" line
- On the SUBCONTRACTOR's VAT return: it enters there the transactions on which it charged no VAT. Two different lines, on two different returns, for the same transaction.
- Subcontracting contract
- It establishes the link between principal and subcontractor. Failing that: a quote, a signed purchase order, or any other document recording the agreement on the work and its price.
- Subcontractor covered by the VAT-exempt small business scheme ("franchise en base")
- Where the subcontractor is covered by the VAT-exempt small business scheme ("franchise en base"), the receiving business has NO VAT to pay to the tax administration on that subcontracting.
Good to know
- The reverse charge moves who is liable for the tax, it does not wipe it out: the receiving business collects the VAT and pays it over, then charges VAT to its own client.
- A subcontractor that charges no VAT on those transactions may nonetheless DEDUCT the VAT on its own costs.
- If the receiving business forgets to apply the reverse charge, it faces a fine of 5% of the deductible amount.
- Cleaning falls within scope only where it follows on from the work or is incidental to it: a standalone cleaning service is not covered on that basis.
- The construction reverse charge is a mechanism internal to French law, separate from the reverse charge on intra-Community services, which belongs to another regime with other returns.
- Using a subcontractor comes with other checks served elsewhere, including the compliance certificate the principal must obtain from its subcontractor.
Common mistakes
- Charging VAT as a subcontractor: VAT is not paid by the subcontractor, and the invoice must not show it.
- Leaving the wording "autoliquidation" off the invoice: it is what shows why no tax was collected.
- Confusing the two return lines: "other taxable transactions" for the receiving business, "other non-taxable transactions" for the subcontractor.
- Forgetting to apply the reverse charge as the receiving business: the fine is 5% of the deductible amount.
- Assuming that not charging VAT prevents deducting it: the subcontractor keeps the right to deduct VAT on its own costs.
- Applying the reverse charge with no subcontracting link established: a subcontracting contract is needed or, failing that, a quote, a signed purchase order or an equivalent document.
- Applying the reverse charge where the principal is not registered for VAT: the mechanism assumes a taxable principal.
- Paying VAT to the administration where the subcontractor is covered by the VAT-exempt small business scheme ("franchise en base"): in that case the receiving business has nothing to pay.
Frequently asked questions
Who pays the VAT on construction subcontracting?
The receiving business, the one that brings in the subcontractor. The subcontractor does not charge VAT; the receiving business pays it directly to the tax administration, then charges VAT to its own client.
What wording goes on the subcontractor's invoice?
The wording "autoliquidation". The subcontractor does not charge VAT and must put that wording on its invoice.
Which work is covered?
Construction of buildings and other immovable works: work by the various trades involved in renovation or construction, civil engineering and public works, fitting out buildings, repair or restoration work, and cleaning that follows on from the work or is incidental to it.
Where are these transactions reported?
The receiving business enters the amount excluding VAT of the services received on the "other taxable transactions" line of its VAT return; the subcontractor enters its own on the "other non-taxable transactions" line.
What if the subcontractor is covered by the VAT-exempt small business scheme ("franchise en base")?
The receiving business has no VAT to pay to the tax administration on that subcontracting.
What is the penalty if the receiving business forgets?
A fine of 5% of the deductible amount, that is, of the VAT.
Go further
Compute the related amounts
Understand this form: the related course
Official sources
- entreprendre.service-public.gouv.fr — VAT reverse charge on subcontracting in the construction sector (checked 7 July 2023, Ministry of Finance): principle of moving liability to the receiving business, no VAT charged by the subcontractor and the compulsory wording "autoliquidation" on its invoice, fine of 5% of the deductible amount where the reverse charge is forgotten, list of work covered including cleaning that follows on from the work, establishing the link by a subcontracting contract or failing that a quote, signed purchase order or equivalent document, "other taxable transactions" line for the receiving business and "other non-taxable transactions" line for the subcontractor, the subcontractor's retained right to deduct, and no VAT to pay where the subcontractor is covered by the VAT-exempt small business scheme "franchise en base" (French General Tax Code, article 283 2 nonies and article 1788 A, BOI-TVA-DECLA-10-10-20) — September 11, 2026
- entreprendre.service-public.gouv.fr — VAT applicable to trade in services within the European Union (checked 2 December 2025): the reverse charge by the customer there follows a DIFFERENT regime, with its own invoicing and reporting rules — which marks out by contrast the construction mechanism, internal to French law — September 11, 2026
Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.