VAT is essentially characterized as a general tax on consumption which applies to the supply of goods and services located. The tax liability is determined by the nature of the operations carried out or the products concerned, regardless of the personal situation of the taxable person or his customer.
The tax is settled in such a way that at the end of the economic circuit which makes the goods or services available to the purchaser, the tax burden corresponds to the tax calculated on the final sale price demanded from the latter.
The tax relating to a transaction is calculated by applying to the base excluding VAT, whatever its amount, a proportional rate of VAT.
Practical table for the benefit of the basic franchise in 2020
- Lawyers, authors, performers of intellectual works, artists whose 2018 annual revenues for their specific operations are less than € 42,900 excluding VAT.
- Then, if the receipts for the year 2019 exceed the threshold of € 52,800, the lawyer or the artist will have to submit to VAT the services performed from the 1st day of the month in which the excess is made.
NB: there is another specific threshold for other operations.
Practical table for the benefit of the Avocets base franchise in 2020
Revenue exempt from VAT should not be taken into account when assessing whether or not the thresholds are exceeded. On the other hand, receipts not subject to French VAT due to the rules of territoriality are retained. Using the self employment tax calculator comes most useful in such cases.
Effect of the application of the basic franchise regime
- VAT exemption: no VAT collected, deductible and paid.
- Invoices bearing the following mention: “VAT not applicable – article 293 B of the CGI”.
- No VAT return filing.
Real simplified tax regime (RSI)Professionals concernedThe RSI concerns:
- Liberal professionals not covered by the basic franchise, whose revenues for the previous year are less than € 238,000 excluding tax and whose VAT due for the previous year is less than € 15,000.
- Liberal professionals falling under the VAT-based franchise regime but exercising an option for the payment of VAT.
Effects of RSI application
Professionals pay semi-annual installments in July and December. They then file an annual declaration (printed CA12) at the beginning of May of the following year at the latest.
In the first year, the professionals themselves determine the amount of the half-yearly installments for which they are liable. Each deposit must represent at least 80% of the half-yearly VAT actually due.
- The real normal diet
- Professionals concerned
The actual normal regime concerns:
- Liberal professionals whose receipts for the previous year are greater than € 238,000 excluding tax, or whose VAT due for the previous year is greater than € 15,000.
- Liberal professionals whose income for the current year exceeds € 269,000 excluding tax.
- Liberal professionals falling under the franchise regime based on VAT or RSI but exercising an option for the payment of the tax according to the real normal regime.