Freedom to provide services in France

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Businesses established in a country of the European Economic Area (EEA) or in the Swiss Confederation (CH) can undertake occasional and temporary commercial, craft, industrial or liberal activities in France without having a permanent establishment there.

They must, in this case, comply with certain formalities required by the various competent authorities in France with regard to:

  • filing a declaration of freedom to provide services (for certain business activities);
  • VAT;
  • the posting of staff;
  • the taxation of profits;
  • and, in the building industry, mandatory insurance and registration with a special holiday insurance fund.

The Enterprise Europe Network department of Luxembourg's Chamber of Skilled Trades and Crafts can, based on a mandate, complete some of the mandatory formalities for businesses so that they can provide services in France.

Who is concerned

Businesses established in Switzerland or in an EEA country benefit from the liberalisation of the provision of services based on the principle of the mutual recognition of qualifications.

All service providers established in Luxembourg may therefore freely provide occasional and temporary services in France provided that:

  • they are a national of Switzerland or of an EEA Member State;
  • they have the qualifications required to carry out this business activity in the EU (see "Preliminary steps");
  • they are properly established in the EU.

Some business activities nonetheless require a declaration of freedom to provide services and adequate knowledge of the French language.

Businesses established outside the CH or the EEA are under an obligation to register their business in France for any occasional and temporary services in France. 

Businesses wishing to provide services on a regular basis in France must also create a permanent establishment and register it in France.

Prerequisites

Regulated business activities in Luxembourg - mutual recognition of qualifications

If the profession is regulated in Luxembourg and the professional is properly established there, his/her qualifications are automatically recognised in France.

Exceptions: for the business activities with potential public health or safety implications below, the professional must nonetheless file a declaration of freedom to provide services with the French authorities:

  • maintenance and repair of vehicles and machinery, excluding bicycles;
  • installation, maintenance and repair of networks and equipments using fluids, and also equipment and materials used for the provision of gas, for heating buildings and for electrical installations;
  • chimney sweeping;
  • production of dental prostheses.

Business activities not regulated in Luxembourg - checks on qualifications

For certain professions, which are not regulated in their country of permanent establishment but are regulated in France, the French authorities may check on the equivalence of the service provider's professional qualifications by requiring:

  • professional experience of 2 years during the past 10 years in the Member State of origin;
  • and a training certificate providing proof of the qualification to carry out said profession.

How to proceed

Declaration of freedom to provide services - skilled craft activities

For certain specific skilled crafts activities (see "Prerequisites"), the professional must submit a declaration of freedom to provide services (déclaration de libre prestation de services - LPS) in writing by registered letter:

  • either to the Chamber of Skilled Trades and Crafts of the region in which he/she initially plans to provide services (craft businesses with less than10 employees at the time the business was created);
  • or to the Chamber of Commerce and Industry of the region concerned (other activities and businesses with more than 10 employees at the time the business was created).

The following must be enclosed with the declaration:

  • an EU certificate issued by the Chamber of Skilled Trades and Crafts;
  • proof of insurance cover or other personal or group professional liability protection;
  • an extract from the police records of the technical manager(s);
  • a copy of the Master Craftsman's certificate or education diplomas;
  • a copy of the technical managers' ID card/passport;
  • the type of business activity to be conducted in France;
  • a copy of their Luxembourg business permit;
  • the company’s articles of association.

The declaration of freedom to provide services must be renewed annually.

In the case of a business activity with potential public health or safety implications (see "Prerequisites"), the service provider must wait until the Chamber of Skilled Trades and Crafts has checked his/her qualifications before starting to provide the service. If no reply is received after a maximum of one month, he/she may start to provide the service.

Declaration of freedom to provide services - medical professions

For certain medical professions, the professional must submit a declaration of freedom to provide services to the National Council of the professional organisation concerned before starting to provide services in France:

If the professional meets the qualification criteria, the National Council:

  • registers him/her on a specific list;
  • and sends a receipt with details of his/her registration number and the type of profession.

The professional may then start working in France using the French job title. The professional must comply with the rules of the profession in France – in particular, its code of conduct.

The declaration of freedom to provide services must be renewed annually.

Declaration of freedom to provide services - healthcare professions

For certain healthcare professions, the professional must submit a declaration of freedom to provide services to the National Council of the professional organisation concerned before starting to provide services in France:

In the case of the other healthcare professions listed below, the professional must submit a declaration of freedom to provide services to the Bureau RH2 of the Department of healthcare provision at the French Ministry of Health and Social Security:

  • nursing auxiliary / healthcare assistant;
  • ambulance technician;
  • hearing-aid specialist;
  • childcare assistant;
  • genetics consultant;
  • dietician;
  • occupational therapist;
  • radiology technician;
  • optician;
  • speech therapist;
  • orthoptist;
  • pharmacy technician (including in hospitals);
  • prosthetics professions;
  • psychomotor therapist;
  • radiophysician;
  • medical laboratory technician.

The declaration of freedom to provide services must be renewed annually.

Declaration of freedom to provide services - other occupations

For all other occupations, the professional can obtain information on the procedures for their occupation as follows:

  • either by consulting the regulated professions database on the website of the European Commission in order to contact the relevant body directly;
  • or by contacting the Enterprise Europe Network team of the Luxembourg Chamber of Commerce or Luxembourg Chamber of Skilled Trades and Crafts which can provide information on a case-by-case basis.

VAT applicable

B2B services

Barring exceptions, in principle, a Luxembourg company providing a service in France to a professional established in France (subject to VAT in France), does not need a French VAT number.

It can issue invoices without VAT by quoting the following on the invoice: "autoliquidation de la TVA par le preneur" (reverse charging of VAT by the recipient) and the recipient's valid VAT number.

In order to invoice the provision of services without VAT to professionals (B2B) in another EU Member State, the seller has to:

  • first, check the validity of the client's VAT number in the VIES VAT number validation database on the website of the European Commission;
  • where possible, print and keep the results page with the client's VAT number and date of verification;
  • and indicate the client's valid VAT number on the invoice.

B2C services

Barring exceptions, in principle, a Luxembourg company providing services in France to end consumers (not subject to VAT) must apply Luxembourg VAT.

Exceptions (works, transportation, catering, vehicle hire, etc.)

For certain services (e.g. online services for consumers, building work, transportation, catering, entertainment ticket sales, vehicle hire, etc.) however, the service provider must apply French VAT.

In such cases, the Luxembourg company must therefore register for VAT in France by sending the following to the Service des Impôts des entreprises étrangères (Foreign Company Tax Department):

  • an extract from the trade register or a certificate of registration with the Luxembourg Chamber of Skilled Trades and Crafts;
  • a certificate attesting to the status of taxable person, issued by the Registration Duties, Estates and VAT Authority (Luxembourg);
  • a copy of the quotation as proof of the need for registration;
  • a copy of the managers' or directors' ID card or passport;
  • the company’s articles of association.

It must then set up its business space on the French tax authority's website in order to declare and pay VAT online.

VAT rates in France are as follows:

  • 20 % standard rate (most services);
  • 10 % intermediate rate (in particular, passenger transportation, catering, home renovation work);
  • 5.5 % reduced rate (in particular, services for the disabled, gas and electricity provision, social housing and work to improve home energy efficiency).

Posting of workers

Declaration of posting

A company established in Luxembourg may freely post workers to France in the context of a provision of services, provided that such workers (regardless of their nationality) are authorised to work and reside in Luxembourg.

In all cases, employees must be part of the permanent staff of the business. For this reason, temporary staff, for instance, cannot be posted in the context of freedom of provision of services.

Nonetheless, companies posting staff to France must submit a declaration of posted work in advance to the Labour Inspectorate in the Department in France (Département - the French region concerned) in which the service will be provided.

The declaration must be submitted in French, by registered letter with acknowledgement of receipt or by fax or email.

It must include the following information:

  • name or company name, address and legal form of the company;
  • where applicable, the name and address of the company's legal representative in France;
  • date of start of work and expected duration;
  • location where the service is provided;
  • nature of the service to be performed;
  • use of hazardous materials or processes;
  • surname, first name, date of birth, gender and nationality of posted staff, date of signature of their employment contracts.

Luxembourg companies must inform the French Department's labour inspector of the applicable working hours where the services are provided but they must comply with the French mandatory labour regulations in force.

Social Security - A1 certificate of posting

In principle, posted staff remain affiliated to the Luxembourg social security during the first 24 months of their posting.

Before the posting, employers must apply for a certificate for work abroad to the Joint Social Security Centre (either by post or using the SECUline).

The employer will then receive, for each posted employee, 2 copies of an A1 certificate valid for 12 months. The certificate will enable the employee to show that he/she remains covered by Luxembourg social security during the posting.

During their period of posted work, employees must always carry the following:

  • the A1 certificate;
  • and their European health insurance card (on the back of their Luxembourg social security card).

The employer must, if applicable, renew the application within 12 months. The certificate of Luxembourg social security insurance cover may then be renewed for a further 12 months.

However, if the posting lasts longer than 24 months, the employer must:

  • either apply to the CCSS for an exemption in order to extend the period of posting;
  • or register the posted employee with the French social security.

Income tax

In principle, Luxembourg income tax still applies to posted staff for the duration of their posting, provided:

  • they remain in France for no more than 183 days;
  • their employer established in Luxembourg continues to bear the costs and pay their remuneration;
  • and that their remuneration is not paid by a permanent establishment in France.

However, if they remain in France for more than 183 days, all salary payments received since the beginning of their assignment in the context of their posting will become taxable in France.

Mandatory labour regulations

Employers must comply with the mandatory French labour regulations with specific regard to the following:

  • the working hours;
    • 35 working hours per week (save for exceptions and excluding overtime);
    • a minimum of 11 hours' rest per day;
    • 24 consecutive hours of rest per week on Sundays (added to the 11 hours' rest per day, i.e. 35 consecutive hours per week);
    • Sunday work;
    • night work;
    • duration of paid leave: a minimum of 5 weeks per year;
    • minimum salary: EUR 9.53 per hour, gross, as of 1 January 2014;

Employers may under no circumstances reduce workers' salaries while working in France, even if the minimum salary in France is lower than in Luxembourg. Employers will therefore continue to pay their employees the salary agreed on in their contract in Luxembourg.

  • payment or time off for overtime:
    • under certain collective agreements, an increase of 10 % per hour of overtime worked;
    • if there is no collective agreement, an increase of 25 % for the first eight hours of overtime and 50 % beyond that.
    • conditions for the posting of workers (temporary work);
    • health regulations and working conditions;
    • protective measures for pregnant women, children and young people;
    • equal treatment of men and women and other anti-discriminatory measures.

Taxation of the business' profits

Occasional services without a permanent establishment in France

As a general rule, Luxembourg companies providing occasional services in France are subject to corporation tax in their country of establishment, i.e. in Luxembourg.

Occasional services with a permanent establishment in France

If the service provider is deemed to have a permanent establishment in France, the company is liable for tax in France for income generated in France.

In accordance with the applicable Luxembourg-France non-double taxation treaty, a Luxembourg company is specifically deemed to possess a permanent establishment in France if it has the following in France:

  • a management head office;
  • a branch office;
  • an office;
  • a factory;
  • a workshop;
  • a warehouse or stockroom;
  • or if it works on a building site or assembly line whose duration exceeds 6 months.

In such cases, it must therefore declare any profit made in France by this permanent establishment to the French Public Finances Directorate (DGFiP). Such profits will in principle be subject to a withholding tax of 5 %, and then:

In Luxembourg, income from this permanent establishment abroad is exempt from tax. However, the tax rate applicable to Luxembourg income will be calculated based on the company's worldwide income (Luxembourg income + foreign income). The company must therefore also show its French income on its Luxembourg tax return.

Construction industry – professional liability insurance and Caisse de Congés Intempéries BTP (Building and public works bad-weather leave fund)

Mandatory professional liability insurance

All professionals engaged in carrying out building works in France must guarantee to repair any construction flaws or damage that may affect the solidity of the work and its fixtures for 10 years after acceptance of the work.

The company must therefore:

  • purchase a professional liability insurance policy to cover this 10-year guarantee;
  • and indicate on its quotations and invoices:
    • the insurance policy covering its business activity;
    • the contact details of the insurer or guarantor;
    • and the geographical coverage of the policy or guarantee.

Further information on building risk insurance is available on the website of the Fédération française des Sociétés d’Assurance (French association of insurance companies).

Registration with a Caisse de Congés Intempéries BTP (Building and public works bad-weather leave fund)

All building and public works companies that post workers to France must in principle register with and declare their employees to the Caisse Congés Intempéries BTP where the service is provided.

However, the company can be exempted from registration if it can prove that it is providing its employees with "essentially similar protection" to that which is granted to employees in France in terms of paid leave.

Craftsmen working on an independent basis do not need to register with the Caisse Congés Intempéries BTP. However, they have to register if they are posting workers.

Online services and forms

Downloadable forms

Note: view tips for using PDF forms.

Who to contact

Enterprise Europe Network

'Contact Entreprise' at the Chamber of Skilled Trades and Crafts - Luxembourg

  • Chamber of Skilled Trades and Crafts Contact Entreprise

    Address:
    2, circuit de la foire internationale L-1347 Luxembourg-Kirchberg Luxembourg
    B.P. 1604, L-1016
    Email address:
    contact@cdm.lu
    Website:
    http://www.cdm.lu/

Related procedures and links

Links

Further information

Legal references

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