If your business is VAT registered in France, the French tax authorities require VAT payments to be made electronically — typically via the SEPA direct debit system.

This article explains:

• What SEPA is

• How SEPA VAT payments work in France

• How to set it up

• What happens each month

• What to do if you do not have a SEPA bank account

• Potential penalties for non-compliance

What is SEPA?

SEPA stands for Single Euro Payments Area.

It is a European payment system that allows businesses to make euro payments between participating countries using standardised bank transfers and direct debits.

SEPA includes:

• All EU member states

• Plus certain additional European countries (e.g. Norway, Iceland, Switzerland, Liechtenstein)

If you hold a euro bank account within the SEPA zone, you can usually use it to pay French VAT via direct debit.

Why SEPA Is Required for French VAT

The French tax authorities require VAT payments to be made electronically.

For most VAT-registered businesses in France, the standard method is:

👉 SEPA direct debit (prélèvement SEPA)

This allows the tax office to automatically collect the VAT amount due each period directly from your bank account.

Manual bank transfers are generally not accepted for standard VAT payments.

How to Set Up SEPA for French VAT

To enable SEPA payments for your French VAT account, the following steps are required:

1️⃣ Provide Your Bank Details

You must provide:

• IBAN

• BIC/SWIFT code

• Name of account holder

• Bank name

• Bank country

The bank account must:

• Be denominated in EUR

• Be located in a SEPA-participating country

• Allow SEPA direct debits

2️⃣ Sign a SEPA Mandate

A SEPA direct debit mandate must be signed authorising the French tax office to collect VAT payments from your account.

This mandate is submitted through your French tax portal account.

hellotax can assist with:

• Preparing the mandate

• Submitting it

• Confirming activation

3️⃣ Activation Confirmation

Once approved by the tax office:

• The SEPA mandate becomes active

• Future VAT payments will be collected automatically

What Happens Each Month (or Quarter)

Once SEPA is active:

1. Your VAT return is submitted.

2. The tax office calculates the VAT due.

3. On the official due date (usually around the 19th–24th of the following month, depending on filing frequency), the amount is automatically debited from your bank account.

4. You will see the transaction referenced by the French tax authority.

⚠️ Important:
You must ensure sufficient funds are available in your bank account on the due date.

If the direct debit fails due to insufficient funds, it is treated as a late payment.

What If You Do Not Have a SEPA Bank Account?

Some international businesses do not hold a bank account within the SEPA zone.

In this case:

• A non-SEPA bank account cannot be used for French VAT direct debit.

• The French tax office does not typically allow alternative payment methods for standard VAT returns.

Your options may include:

• Opening a EUR bank account within the SEPA zone

• Using a European fintech or payment institution that supports SEPA direct debit

• Arranging a compliant payment solution via your fiscal representative (where applicable)

If you are unsure whether your bank supports SEPA direct debit, please contact your bank directly or speak with your hellotax Account Manager.

What Happens If You Do Not Pay via SEPA?

If VAT is not paid correctly or the SEPA debit fails, the French tax office may apply:

💰 Late Payment Interest

Interest is charged on unpaid VAT from the day after the due date.

⚠️ Late Payment Penalties

The tax office may apply a penalty (commonly starting at 5% of the unpaid VAT amount).

📩 Formal Collection Procedure

If VAT remains unpaid, the tax office may initiate formal recovery procedures, which can include:

• Official payment notices

• Enforcement measures

• Potential restrictions on tax compliance status

Repeated non-payment may also increase the risk of tax audits or additional scrutiny.

Key Responsibilities for Clients

If you are VAT registered in France:

✅ Ensure a valid SEPA mandate is active
✅ Maintain sufficient funds in your bank account before the due date
✅ Inform hellotax immediately if your bank details change
✅ Notify us if your bank account is closed or replaced

Summary

💡 Important:
Failure to maintain an active SEPA mandate or sufficient funds can result in automatic penalties. We strongly recommend ensuring your payment setup is in place before your first French VAT return is due.

If you need assistance setting up SEPA for your French VAT account, please contact your hellotax Account Manager.