Elimination of the VAT certificate on renovation work: the formalism does not disappear completely!

I. Before the finance law: a binding mechanism

Until March 1, 2025, the customer had to provide to service providers carrying out the work one specific certificate certifying that the work carried out met the eligibility criteria for reduced VAT (5.5% or 10% depending on the case).

The certificate had to be completed by the customer (individual or professional) and given to the company before the work is carried out, or before invoicing.

This administrative obligation was sometimes perceived as a serious constraint, both for construction companies and for their customers.

In this respect, it should be noted that the Council of State (EC, judgment of 26 December 2008, decision no. 308530) recalled that having a certificate was not a simple condition of proof but a fundamental condition for applying the reduced rate of VAT.

The fact of not keeping this certificate thus exposed the service provider to a risk of recovery equal to the delta between the reduced VAT rate applied and the standard VAT rate.

II. The Finance Law for 2025: desire for administrative simplification

La Finance law for 2025 enacted on February 15, 2025 abolished this obligation to provide the certificate for certain types of work.

Since the 1^Er March 2025, the customer must put a note on the quotation or the invoice certifying that the conditions necessary to benefit from the reduced VAT rate are met.

This statement must specify:

• The nature of the work carried out
• The statement that this work falls within the scope of the reduced VAT rate
• The year of construction of the premises concerned (if necessary in order to benefit from the reduced rate).

This reform allows simplify procedures for individuals and building companies, while limiting the risks of administrative errors.

Point of attention : For work in progress on this date, the certification may be carried out by the customer on the estimate or invoice if he has not already established the certificate allowing the application of the reduced rate.

The service provider must keep the estimate or the invoice with the mention in support of his accounting.

III. The premises concerned

Only residential premises that have been completed more than two years ago are eligible for certification on an estimate or invoice by the customer, and can therefore benefit from VAT invoicing at a reduced rate.

The premises concerned include in particular:

• Individual houses
• Condominium apartments
• Residential premises occupied by their owner, tenants or occupants free of charge

Buildings for strictly professional, commercial or industrial use are not affected by this reform and remain subject to conventional VAT rules.

IV. The works concerned

Only certain works are affected by the modification made by the finance law for 2025.

It's about improvement, transformation, layout and maintenance works mentioned in article 279-0bis of the FTC.

• this work would benefit from the rate of 10% in metropolitan France (2.1% in Guadeloupe, Martinique and Réunion).

Also eligible are renovation or energy improvement work defined by article 18 bis of annex IV to the FTC.

This may be work to develop, install, install and maintain materials and equipment such as thermal insulation materials, efficient heating equipment, sanitary hot water production systems, and energy regulation and programming equipment.

• This work would benefit from the rate of 5.5% (2.1% in Guadeloupe, Martinique and Réunion).

Attention, the following are therefore taxable at the standard rate of 20%:

• Work that involves a substantial modification of the building or an expansion.
• And the purchase of materials directly by the customer. The company must therefore invoice the customer for both the work and the equipment.

V. Cyplom accompanies you:

1. Keep your supporting documents

Although the certification has been abolished, fiscal responsibility does not disappear.

Businesses carrying out the work must be able to prove that the work invoiced at a reduced rate is indeed eligible.

Therefore, keep supporting documents well in particular:

• Invoices indicating the nature of the work
• Any document that can prove the age of the building
• Signed quotes and any exchange with the customer justifying the application of the reduced rate

If you are customer, also keep certified quotes and invoices. Indeed, as part of a tax audit, you will have to transmit them to the authorities.

2. Beware of mistakes that can be expensive

If you do not include mandatory information on quotes or invoices, or if information is missing, incomplete, or inaccurate, you risk:

• The application of the 20% rate on work, with the application of penalties
• To be jointly and severally (company and customer) required to pay the additional VAT

Our team is at your disposal to assist you in the analysis of these aspects as well as in the completion of your future real estate projects.

Thanks to our expertise, you will benefit from personalized follow-up to ensure the compliance of your tax situation with complete peace of mind.