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Company Value Added Assessment (EBAF)

Verified 01 January 2023 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Finance

The company value-added contribution (CVAE) is a local tax payable by companies with a certain turnover. It is one of the 2 components of the Territorial Economic Contribution (TFB) together with the company Property Assessment (EFC).

A company (business or individual business) must pay CVAE: titleContent when completing the 2 following:

  • The company shall taxable activity CFE : the professional and self-employed activity is carried out in a normal way in France. The individual who rents furnished buildings is also liable for the EFC.
  • The company realises more than €500 000of turnoverannual tax-free: regardless of legal status or tax regime.

In addition, all companies with a turnover greater than €152,500 must declaration of added value and employee strength, even if they do not ultimately have to pay the AECB.

Please note

the CVAE exemptions are modelled on CFE exemptions.

The CVAE is not due in the year of creation of the company, except in case of resumption of activity.

Any company with a turnover greater than €152,500 must achieve declaration of added value and employee strength, via the form n°1330-CVAE-SD.

The declaration is made by dematerialised with the company tax department, in principle, before 2eworking day following 1to May following the taxation year.

Specifically, the company has until May 3, 2022, to file the return of the EAC paid in 2021.

FYI  

in practice, the tax authority gives companies an additional 15 days to fulfil this reporting obligation, so by 18 May 2022.

Of specific deadlines shall apply in the following cases:

Declaration of value added and employee headcount - form n°1330-CVAE-SD

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On the other hand, the filing of declaration No. 1330-CVAE-SD is not necessary for the company who all conditions following:

  • Completing the framework for the CVAE in its declaration of results (Tables 2033E, 2035E, 2059E and 2072E) 
  • Have only one establishment used for the professional activity
  • Do not employ employees who work for more than 3 months outside the company 
  • Do not operate multiple activities that require different income statements 
  • Not be a Civil business of Means (SCM) 
  • Do not close multiple accounting years during the reporting period: this is the year for which the tax is imposed or the last 12-month accounting period ended in the same year when that fiscal year does not coincide with calendar year.
  • Not merged with another company during the reference period
  • In the case of a foreign company, it must have a permanent establishment in France 
  • Not subject to micro-company tax regime

Warning  

any failure, omission or error concerning the number of employees shall be punishable by a specific fine of €200 by the employee concerned, within €100 000.

The EBAF amount is calculated as follows: Taxable Value Added x EBAF Rate.

Thus, in order to calculate the AECB, it is necessary to determine 2 items ::

  • Taxable Value Added : Calculation basis obtained with accounting information
  • EBAF Rate : Percentage that depends on the company's turnover

Please note

The minimum amount of CVAE due by the companies liable (CA greater than €500 000) is fixed at €63, except for total exemption from contribution.

Taxable Value Added

The added value shall serve as the basis for the calculation of the EAC, it shall be determined in this way: Withholding income - chargeable expenses.

The taxable value added to the AECB shall not exceed a percentage of the turnover, it shall be capped to:

  • 80% of turnover for companies whose turnover is less than or equal to €7 600 000.
  • 85% of turnover for companies with a turnover greater than €7 600 000.

Value added calculation is performed on a reference period which depends on the company's fiscal year.

Reference period

The reference period to be used for the calculation of the EBAF depends on the year-end date ::

  • When the company closes its year on December 31 : the value added of the year in respect of which the tax is due is retained
  • In the case of a fiscal period of less than or more than 12 months ended in the taxation year : the value added generated during this year is retained
  • In case of company creation during the year - the value added produced between the date of creation and december 31 of the taxation year is retained
  • If no year-end occurs in the taxation year The value added earned is retained for the period from the first day following the end of the previous CCSA calculation period to December 31 of the taxation year.
Retention products

The retention products include:

  • Turnover: sales (products and services), royalties (patents, licences, brands) and capital gains from the disposal of tangible or intangible assets
  • Stored production and locked-in production
  • Operating Grants
  • Other current management products, excluding income assessments on pooled transactions
  • Value-Added Transfers
  • Revenues on amortised receivables relating to operating income.
Chargeable expenses

The charges (to be deducted from the products selected) include:

  • Purchases of goods, raw materials and supplies
  • Inventory Change
  • Benefits and fees paid
  • External services reduced by discounts, discounts and discounts obtained
  • Other current management expenses
  • Impairment of tangible and intangible assets
  • Revenue and related taxes, indirect contributions and domestic consumption tax on energy products
  • Depreciation write-offs for tangible property made available under a management lease or lease agreement, or a lease agreement for a term of more than 6 months.

EBAF Rate

To obtain the EBAF amount, the taxable value added is multiplied by the CVAE rate.

This rate depends on turnover excluding company tax, between 0 and 0,375%.

Tableau - Tax rate of the AECB based on turnover (AFC HT)

Tax-free turnover

Effective tax rate

Less than €500 000

0

Between €500 000 and €3 million

0,125%  x (CA) €500 000)€2.5m

Between €3 million and €10 million

0,125% + 0,225% x (CA) €3 million)€7 million

Between €10 million and €50 million

0.35% + 0.025% x (CA) €10 million) €40 million

More than €50 million

0,375%

Example :

A company achieves HT revenue of €2 million. Taxable value added is €550 000.

The tax rate is: 0.25% x (2,000,000 - 500,000) / 2,500,000 = 0,075%.

The amount of the EBAF is therefore: 550 000 x 0,075% = €412.50.

A company with a turnover less than €2 000 000 benefit from a reduction of €250 of CVAE.

Additional tax and management fees

One additional tax to the AECB shall be added to the amount of the EBAF so calculated. It shall be 6.92% of the amount of the CVAE and collected for the benefit of CCI France and the regional chambers of commerce and industry.

Some companies exempt of this tax:

  • Craftsmen registered in the trades register and not on the electoral list of the Chamber of Commerce of their electoral district
  • Agricultural Cooperatives and Sica
  • Fishermen and artisanal fishing businesses
  • Furnished rentals
  • Head of institution and head of pension

In addition, the company must pay management fees local taxation equivalent to 1% the amount of the EBAF and the additional tax.

In the end, the amount to be paid by the company is calculated as follows: CVAE due + additional fee + management fee.

Example :

A company is liable for €412.50 under the AECB. The additional tax therefore, €28.50. The management fees in addition, they are fixed at about €4.40 (i.e 1% of 412,50 + 28,50).

In total, the company must pay a global amount of €445.

The company responsible for the CVAE shall pay the on its own initiative, it does not receive a tax notice.

Payment terms vary by previous year's PAYE amount by the company. The threshold shall be €1,500.

CVAE less than or equal to €1,500

The EBAC is paid in one by means of online tax account of the company when winding-up and settlement (also called final liquidation of CVAE), via form no. 1329-DEF.

This declaration shall take place no later thaneworking day following 1to of the year following the year of taxation.

Statement of liquidation and regularisation of CVAE - form n°1329-DEF

Example :

The EBAF due for 2021 must be paid by electronic payment by May 3, 2022.

Of specific deadlines shall apply in the following cases:

  • Within 60 days of cessation of business in the year
  • Within 60 days of the decision to initiate collective proceedings (backup, recovery or settlement (judicial), unless the opening of the proceedings does not terminate the activity.
CVAE greater than €1,500

The EBAC is paid in 2 prepayments by means of online tax account of the company, via the deposit statement n°1329-AC-SD:

  • one first prepayment equal to 50% of the EBSA due, by 15 June of the taxation year
  • one second down payment equal to 50% of the EBSA due, by 15 September of the taxation year

In the event of a surplus resulting from an overpayment of prepayments, the latter shall be reimbursed by the tax services, net of any other direct taxes due.

In addition, the company must carry out a winding-up and settlement (also called final liquidation of CVAE), via form no. 1329-DEF. This declaration shall take place on the online tax account, by 2eworking day following 1to of the year following the year of taxation.

CVAE Prepayment Statement - Form #1329-AC-SD

Statement of liquidation and regularisation of CVAE - form n°1329-DEF

Of specific deadlines apply to this return if:

  • Within 60 days of cessation of business in the year
  • Within 60 days of the decision to initiate collective proceedings (backup, recovery or settlement (judicial), unless the opening of the proceedings does not terminate the activity.

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