10. Other Business Taxes in France

1. 10.1. Taxe Professionnelle - Business Rates
   10.2. VAT
   10.3. Payroll Taxes

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10.2. VAT - Taxe sur la Valeur Ajoutée (TVA)

TVA (Taxe sur la Valeur Ajoutée) is an expenditure tax imposed on consumers of goods and services.

Companies act as huge tax collectors for the French Government, not least in the collection of TVA, which generates more revenue than any other tax.

TVA is payable on almost all commercial goods and services, with few exceptions.

The most notable of the exceptions is residential property lettings, although the provision of services on a letting comes within the ambit of VAT.

The main rate of TVA in France is 19.6%, but there is a reduced rate of 5.5% for food, travel, some domestic personal services and most entertainment events. It is also available for property restoration projects provided carried out by a professional building contractor.

The reduced rate of 5.5% applicable to repair and improvement works is available to residential dwellings.

The rate is only applicable on the costs of professional labour and materials and is not available for materials only.

So, in the latter case, the materials would need to be purchased at 19.6%, whilst the rate on the labour would be 5.5%.

There is also a rate of 2.1% for medical prescriptions, TV licences, sale of live animals, press publications and certain entertainment events.

A micro-entreprise can neither claim nor charge TVA, but this option is available to regime réel companies, and is obligatory if their turnover exceeds the TVA threshold.

There are more generous concessions for artistic professions, more of which you can read about on the site of their social security organisation, La Maison Des Artistes. The same concessions also apply to writers, about more of which you can read on the site of their social security organisation, AGESSA.

Accordingly, if you reach these levels of turnover you are obliged to charge TVA, although where these limits are only marginally exceeded by up to a few thousand euros, TVA need not be imposed for two years, including the year in which the limit was exceeded.

If you do not charge TVA because you are a micro-entreprise then all invoices to your customers must state that TVA is not applicable, as follows - 'TVA non applicable, art 293B due CGI'.

TVA returns need to be made monthly or quarterly depending on the level of turnover.

If the TVA paid is greater in any period than the TVA received then you may elect to either seek reimbursement or arrange a credit against the next declaration.

The form used for the TVA declaration is for regime reel companies is CA12, and only the brave dare to try and understand and complete it!

The return should be submitted by 30th April of each year or within three months of close of accounts if your accounting year is not the calendar year. The TVA declaration can be made and paid on-line.

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