In France the purchase of goods related to investment in the improvement, modification, fit-out and maintenance and in certain equipment for residential buildings constructed more than 2 years prior is subject to a reduced VAT rate (Code Général des Impôts, Art. 279-0 bis, 1; Instruction fiscale 3C-2-10 N°31). Thus the purchase of goods such as this by private individuals is thereby indirectly promoted.

This reduced VAT rate applies to service, equipment and delivery thereof (Instruction fiscale 3 C-7-06 N°202, titre 1, chapitre 2, section 1, 75). For the equipment to be eligible for the reduced VAT rate, it must be delivered and installed by the same company (either directly by this company or by a sub-contractor) and the material and the installation must be listed on the same invoice (Instruction fiscale 3 C-7-06 N°202, titre 1, chapitre 2, section 1, 82).

The reduced VAT rate is 5.5% on mainland France and on Corsica and is 2.10 % in the overseas departments and regions (Instruction fiscale 3 C-7-06 N°202, titre 2, 211; Instruction fiscale 3 C-2-10 N° 31).

The following points should be noted in relation to the eligibility of photovoltaic systems for support:

• Systems should comply with EN 61215 or NF EN 61646. (Instruction fiscale 3 C-2-01 N° 119, 2; Art.1 Arrêté du 9 février 2005);
• Systems should be designed to meet the residential electricity consumption of a building (systems up to max. 3 kW or max. 30 m²); with larger systems, the lower tax rate applies to the installation of the first 3 kW use and normal VAT rate applies above this;
• The varying VAT rates should be shown separately on the invoice (RES N°2007/12 (TCA)).