VAT and training subcontracting in France: can the subcontractor invoice exempt?

It is one of the most frequent questions from freelance trainers working for other organisations: “I invoice a training provider, not the end client — can I invoice without VAT?” The answer is yes, but under precise conditions, and mistakes are costly on both sides of the contract. Here is the full mechanism.

The principle: an exemption attached to the provider, not to the invoicing chain

The French VAT exemption for continuing vocational training rests on Article 261, 4-4°-a of the General Tax Code (CGI): it benefits private-law entities that carry out continuing vocational training and hold a tax certificate issued by the administration (Articles 202 A to 202 D of Annex II to the CGI). Two cumulative conditions in practice:

1. holding a valid activity declaration number (NDA, the registered training provider number);
2. having applied for and obtained the exemption certificate, which is specific to each entity.

The decisive point for subcontracting: this exemption attaches to the provider and the nature of the operation, not to the position in the invoicing chain. French tax doctrine (BOI-TVA-CHAMP-30-10-20-50) even devotes a specific section to continuing vocational training services performed under subcontracting.

A subcontractor with NDA + certificate: exemption is possible

A subcontracting trainer holding their own NDA and their own certificate can therefore invoice the prime contractor VAT-exempt, as long as the service genuinely constitutes continuing vocational training (delivering a course, for instance) and not a service of another nature. It does not matter that they sign no agreement with the end client: it is their own tax position that counts.

Conversely, the doctrine is constant on the symmetrical point: no certificate, no exemption. A subcontractor without one then invoices:

• with VAT at the standard rate, under ordinary rules; or
• without VAT under the small-business franchise (Article 293 B of the CGI) if they stay below the thresholds — common among micro-entrepreneur trainers, but entirely distinct from the training exemption: invoice wording, regime and consequences all differ.

Our general guide to the VAT exemption for training organisations details the certificate application procedure.

Why the prime contractor should care too

Many organisations discover the subject from the wrong end: the invoice. If your own activity is VAT-exempt, the VAT charged by a non-exempt subcontractor is a dry cost for you — you cannot deduct it. For the same service, an exempt subcontractor at €500 a day costs less than a VAT-registered one at €500 excluding tax. Three reflexes:

• ask the subcontractor for their VAT position in writing (certificate, franchise or standard VAT) before negotiating the price;
• record that position in the subcontracting agreement, with an obligation to report any change — it is also useful evidence for indicator 27, which requires you to keep control of your subcontracting relationships;
• always reason in full cost (non-recoverable VAT included) when comparing quotes.

This administrative work is far from trivial for small structures: research on tax compliance costs shows they are strongly regressive. Hansford, Hasseldine and Howorth (2003, Environment and Planning C — see the study) documented this for UK SMEs’ VAT, and the international review by Eichfelder and Vaillancourt (2014 — see the study) confirms that the burden weighs proportionally far heavier on small businesses. In other words: clarifying the VAT regime once and for all, in writing, is a profitable investment.

Special cases worth knowing

• Mixed services: only continuing vocational training operations are covered by the exemption. Sales engineering, equipment rental or consulting invoiced by the same subcontractor follow their own regime — split the invoices.
• Subcontractor established abroad: the mechanism changes completely — reverse charge by the French customer, and a certificate in principle out of reach for a provider not declared in France. Our article on subcontracting to a foreign provider covers this case in detail.
• CPF: the VAT regime does not replace the CPF-specific rules (subcontractor certification, 80% cap, ban on cascading) — see the dedicated article on CPF subcontracting.
• Loss of the NDA: a lapsed activity declaration takes down the exemption conditions for the future. Subcontractor and prime contractor alike should watch this point every year.

Checklist before signing a subcontracting agreement

Five questions to settle in writing, on the prime contractor’s side as well as the subcontractor’s:

1. Does the subcontractor hold a valid NDA? (Checkable on the public list of French training organisations.)
2. What is its VAT position: exemption certificate, small-business franchise or standard VAT? Supporting document required.
3. Is the agreed price expressed consistently with that regime (exempt, excl. VAT + VAT, franchise)?
4. Does the contract include an obligation to report any change of situation (loss of the NDA, exit from the franchise, withdrawal of the certificate)?
5. Is the service purely training, or must ancillary services under different regimes be split out?

Ten minutes of checks at signature avoid months of dispute — and produce ready-made evidence for your subcontractor selection file along the way.

The mistakes that trigger reassessments

• Invoicing “exempt” without a certificate, sheltering behind the prime contractor’s: VAT recall, interest and possible penalties on the subcontractor’s side.
• Confusing the small-business franchise with the training exemption: different invoice wording, different thresholds, different consequences as you grow.
• Never formalising the VAT regime in the contract: at the first inspection, each party discovers the other’s situation.
• Comparing prices excluding VAT without looking at stranded VAT when you are exempt yourself.

Take action

Subcontracting trainer: NDA, tax certificate, a solid contract — the trio that secures your invoices and reassures your clients, as our guide to the subcontracting trainer’s obligations explains. To structure your whole quality approach up to certification, the complete Qualiopi guide and the Complete Kit Certif give you the documents ready to adapt.