It is possible for you to collect and declare VAT even if you do not exceed the thresholds of the deductible based on VAT by subscribing to the option for the payment of value added tax. This option is valid for a period of two years, including the year of subscription to the option. If you do not request a termination of the option before the end of the subscription period, the option will be automatically renewed for a period of two years.
Collection and recovery of VAT
Switching to VAT allows you to collect VAT on your sales and services but also to be able to deduct this tax from your business purchases.
VAT collection: for each of your sales, you will have to calculate and collect a tax which will then be transferred to the administration (10%, 20% or 5.5% depending on the good or service sold). You will need to present the tax to your customer either on your invoices or on the sales receipt that will be sent to them.
Recovery of VAT: it allows you to recover the tax that you will have paid when buying a professional good or your raw materials. The recovery of these amounts can be done annually (VAT CA12 declaration) or monthly / quarterly (VAT CA3 declaration).
Collecting and recovering VAT can allow many professionals (especially commercial activities) to be at market price and limit losses. However, in the context of the provision of services, it can impact the competitive aspect of the prices charged by the professional (not collecting VAT makes it possible to offer lower prices to customers). Make use of the tax refund estimate there.
VAT registration number
As soon as you are required to declare VAT (by exceeding the thresholds for the basic franchise or following a subscription to the option) you are required to have an intra – community VAT number. You will need to make a request to the Business Tax Service (SIE).
If you are not liable for VAT because you have not exceeded the thresholds for the basic deductible but you have opted to pay this tax to the administration, you must also request your number of intra-community VAT from your SIE.
Fill out your VAT return
Since you collect VAT on your sales and services, you are now required to complete a VAT return. This declaration allows you to report to the administration the taxes that you have collected but also those that you can now deduct from your purchases.
Depending on your choice, you can decide to complete a CA12 or CA3 VAT return:
CA12 VAT declaration: the CA12 VAT declaration must be completed annually and sent no later than the 2nd working day following May 1st. It determines the taxes collected and generally initiates the payment of two VAT installments during the following year. It is useful if you do not need to reclaim too much VAT in your year.
CA3 VAT declaration: the CA3 VAT declaration has the particularity of being monthly or quarterly. It generally applies when the professional is under the normal tax regime but can be chosen by self-employed persons under the micro-enterprise regime or the real regime. It is useful if you need to reclaim VAT on your purchases quite frequently and to take more flexibility in managing your cash flow.