Deposit: what it is and how to invoice it?

This is a crucial distinction that is often misunderstood. The legal regime of the initial payment differs depending on the classification:

Deposit (arrhes) (Articles 1590 of the Civil Code and L.214-1 of the Consumer Code)

• The customer can withdraw, forfeiting the deposit paid.
• The seller can withdraw, repaying double the deposit to the customer.
• This is the default for B2C unless otherwise stated in the contract.

Down payment (acompte) (Article 1583 of the Civil Code)

• A firm and definitive commitment from both parties.
• If the customer withdraws: they remain liable for the balance (enforcement action + damages).
• If the seller withdraws: they repay the down payment + pay damages.
• This is the default for B2B unless otherwise stated.

Must be explicitly clarified: the classification must be stated on the quote AND the invoice (e.g., "30% down payment on order, balance on delivery" rather than "Deposit"). In case of dispute, this written classification will be binding in court.

Mandatory details for a down payment invoice (in addition to the 14 standard invoice details):

• Explicit mention "Down payment invoice No. X"
• Reference to the quote or purchase order
• Net amount of the down payment
• Applicable VAT and its amount
• Total amount (VAT incl.) of the down payment
• Outstanding net balance
• Note: "The balance will be invoiced on delivery/completion of service"

VAT treatment depending on the nature of the transaction:

Services:

• VAT becomes due on the date the down payment is received (cash accounting scheme).
• Must be declared in the month (or quarter) of receipt.
• Exception: option for accrual accounting (VAT due on invoicing, as with goods sales) — must be stated on the invoice if chosen.

Goods sales:

• VAT becomes due on delivery of the goods (accrual accounting by default).
• The down payment requires an invoice (down payment invoice) but does not trigger immediate VAT liability.
• Except in special cases (ancillary services to sales, sales with early transfer of ownership).

On delivery: issue the final invoice, which:

• States the total net amount
• References and deducts the previously invoiced down payment amount (and its down payment invoice number)
• Shows the outstanding net balance to pay + VAT on this balance
• References the down payment invoice number

⚠️ Common mistake: failing to reference the down payment invoice in the final invoice = double VAT accounting = tax adjustment. Invoicing software automatically manages this link between down payment ↔ final invoice.