The applicable rates are defined by the local authorities concerned. The overall rate therefore varies from one municipality to another. Professionals carrying out certain activities may be exempt from this. For example: artisans exercising their activity in sole proprietorship or in EURL subject to IR are, under certain conditions. Using the sales tax calculator comes to use in many ways.
Find out more about the Territorial Economic Contribution (CET)
Value added tax is an indirect tax on consumption which in principle concerns all goods and services consumed or used in France.
Companies play the role of tax collectors on behalf of the State: they charge their customers Sales tax at the rate of 20% (standard rate) or 10% or 5.5% (reduced rate) and remit it then to the Treasury, after deduction of the Sales tax they will have paid on their purchases.
It is therefore the final consumer who bears the burden of Sales tax, and not the companies which contribute to the production of goods and services.
Companies whose turnover (excluding Sales tax) does not exceed:
85,800 euros for the sale of goods, sales to be consumed on site or accommodation services (hotels, guest rooms, rural lodges, furnished tourist accommodation),
34,400 euros for other services,
Benefit from the Sales tax-based franchise regime: they do not charge Sales tax to their customers, but in return, they do not recover it on their purchases.
This regime is automatic for new businesses, which may however opt for the application of Sales tax, so as to preserve their rights to deduct.
Creating a business requires choosing a Sales tax regime. The choice of the Sales tax regime is a point that raises many questions for entrepreneurs.
We will provide you with tips to help you choose the right Sales tax regime for your business.
The choice of the company’s Sales tax regime
Reminder on the different possible Sales tax regimes
When setting up a business, it is possible to opt for one of the following Sales tax regimes:
The Sales tax exemption,
The real simplified Sales tax regime (filing of an annual Sales tax return),
The real minimum Sales tax regime (real normal Sales tax regime with simplified profit declaration),
The actual normal Sales tax regime (filing of a monthly Sales tax return),
And the real normal Sales tax regime with the option of filing a quarterly return.
Importance of choosing the appropriate Sales tax regime
- The choice of the Sales tax regime in the context of the creation of your activity should not be taken lightly.
- It has a significant impact on the company’s cash flow. Depending on the option chosen, a declaration which causes an outflow (Sales tax payable) or an entry (Sales tax credit to be reimbursed) of cash must be produced at a certain frequency.
- The impact of the choice of Sales tax regime can be analyzed when making your forecast, on the part devoted to the cash flow plan.
Choosing the right Sales tax regime is a problem that must be discussed with the accountant, like all the other choices linked to the creation of a business (legal status, taxation, etc.). It is therefore important to find your accountant before setting up the business in order to be advised on these choices.