Company Value Added Tax (VAE)

Verified 21 May 2024 - Legal and Administrative Information Directorate (Prime Minister), Ministry of Finance

The contribution on the added value of companies (CVAE) is a local tax payable by companies with a certain turnover. Together with the companies' real estate contribution (CFE), it constitutes one of the two components of the territorial economic contribution (CET).

A company (business individual business or CVAE: titleContent when filling out the 2 conditions following:

  • The company shall exercise taxable activity at the CFE : the professional and self-employed activity is habitually pursued in France. The private renter of furnished buildings is also liable to the CFE.
  • The company achieves more than €500,000 turnover annual tax-free: regardless of its legal status or tax regime.

In addition, all companies with a turnover above €152,500 must make a declaration of value added and of employed personseven if they do not have to pay the EFA in the end.

Please note

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

The CVAE exemptions applicable are modeled on exemptions from CFE. However, since the 1ster January 2024, no longer can any company benefit from an optional exemption from CVAE, temporary or not, subject to grandfathering. Thus, only companies who already enjoyed a voluntary exemption from CVAE before 1er January 2024, see that it shall continue to apply under the same conditions and for the remainder of the period.

Example :

A municipality classified as a regional aid area (ZAFR) deliberated in 2019 to introduce a 5-year exemption from CFE in favor of companies set up in the area:

  • In 2020, a company was set up in the municipality. 2023 is the company’s third year of exemption from CFE and CVAE. The CVAE exemption will be granted in 2024 and 2025.
  • However, if the company is set up in 2023 (or later), the first year of CVAE exemption should have been 2024. However, since the 1er January 2024, a company can no longer apply for the first time for an exemption or voluntary CVAE allowance. The company cannot therefore be exempted from CVAE.

Any company with a turnover of more than €152,500 must perform the declaration of value added and of employed persons, via the form n°1330-CVAE-SD.

The declaration shall be made by dematerialized means on the online tax account of the company, in principle, before the 2e working day following 1er May following the taxation year.

In concrete terms, the company has until May 3, 2024, to report the EFA paid in 2023.

FYI  

In practice, the tax administration grants companies an additional 15 days to fulfill this reporting obligation, i.e no later than 18 may 2024.

Of specific time limits shall apply in the following cases:

  • Within 60 days of universal inheritance
  • Within 60 days of cessation of activity during the year
  • Within 60 days of the decision to open a collective proceeding (safeguard, remedy or liquidation), unless the opening of the proceeding does not terminate the activity.

Declaration of added value and employees - 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 fills all conditions following:

  • Have completed the framework reserved for the CVAE in its declaration of results (Tables 2033E, 2035E, 2059E and 2072E) 
  • Have a single establishment used for the professional activity
  • Do not employ employees working for more than 3 months outside the company 
  • Do not operate multiple activities requiring different income statements 
  • Not be a civilian business of means (SCM) 
  • Do not close several accounting years during the reference period: this is the year in respect of which the tax is assessed or the last accounting year of 12 months closed during the same year where that year does not coincide with calendar year.
  • Not merged with another company during the reference period
  • If it is a foreign company, it must have a permanent establishment in France 
  • Not be subject to the taxation of micro-companies

Warning  

Any failure, omission or error concerning the indication of the number of employees shall be punished by a specific fine of €200 per employee concerned, up to €100,000.

The amount of the CVAE shall be calculated as follows: Taxable value added x CVAE rate.

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

  • Taxable value added : the basis of calculation obtained with the accounting information
  • CVAE rate : percentage which depends on the company's turnover

Please note

The minimum amount of CVAE due by the companies liable (CA more than €500,000) is set to €63, except in the case of total exemption from contributions.

Taxable value added

The added value It is used as the basis for the calculation of the EAAC and is determined in this way: Revenue to be withheld - Chargeable expenses.

The taxable value added to the CVAE may not exceed a percentage of turnover, it is 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 of more than €7,600 000.

The value added calculation shall be carried out on a reference period which depends on the accounting year of the company.

Reference period

The reference period for the calculation of the EAAC depends on the closing date of the accounting year :

  • When the company closes its financial year on 31 December : 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 greater than 12 months ended in the taxation year : the added value produced during this financial year is retained
  • In case of company creation during the year : value added generated between the date of creation and December 31 of the taxation year is deducted
  • If there is no year-end closure in the taxation year : the value added produced is deducted from the first day after the end of the previous EAC calculation period to December 31 of the tax year.
Products to be retained

The products to be retained include:

  • Turnover: sales (products and services), royalties (patents, licenses, trade marks) and capital gains from the disposal of tangible or intangible assets
  • Stored production and fixed production
  • Operating grants
  • Other current management income, excluding profit and loss shares on joint operations
  • Transfers of expenses deductible from value added
  • Income on amortized claims relating to operating income.
Charges chargeable

The chargeable charges (to be deducted from retained products) include:

  • Purchases of goods, raw materials and supplies
  • Change in stocks
  • Benefits and fees paid
  • External services less discounts, rebates and rebates obtained
  • Other current management expenses
  • Disposal losses of tangible and intangible assets
  • Turnover and similar taxes, indirect taxes and internal consumption tax on energy products
  • Depreciation allowances for tangible property made available under a management or leasing agreement or a lease agreement for a period of more than 6 months.

CVAE rate

In order to obtain the amount of the CVAE, the taxable value added is multiplied by the CVAE rate.

This rate depends on turnover excluding company tax, it is between 0% and 0.28%.

Tableau - CVAE turnover-based tax rate (CA HT)

Turnover excluding tax

2023 CVAE Tax Rate Due

CVAE Tax Rate

due under 2024

Less than €500,000

0%

0%

Enter €500,000 and €3 million

0.125% x (AC - €500,000) /€2.5 million

0.094% x (AC - €500,000) /€2.5 million

Enter €3 million and €10 million

0.125% + 0.225% x (AC - €3 million) /€7 million

0.094% + 0.169% x (AC - €3 million) /€7 million

Enter €10 million and €50 million

0.35% + 0.025% x (AC - €10 million) / €40 million

0.263% + 0.019% x (AC - €10 million) / €40 million

More than €50 million

0.375%

0.28%

Example :

A company earns an HT turnover of €2 million. The taxable value added is €550,000.

The tax rate is: 0.094% x (2 000 000 - 500 000) / 2 500 000 = 0.056%.

The amount of the CVAE is therefore: 550 000 x 0.056% = €310.20.

The company which has a turnover of less than €2 000 000 is entitled to a rebate (reduction) of €188of CVAE.

In addition, the CVAE is not due where its annual amount is less than or equal to €63.

Additional fee to the CVAE

One additional fee to the CVAE is added to the amount of the EFA thus calculated. It is fixed at 9.23% the amount of the CVAE is cashed to CCI France and the regional chambers of commerce and industry.

Some companies are exempt of this tax:

  • Craftsmen registered in the trades register and not included on the voters list of the chamber of commerce in their riding
  • Agricultural cooperatives and Sica
  • Fishermen and artisanal fishing businesses
  • Furnished rentals
  • Head of institution and pensioner

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

Example :

A company is liable to €412.50 under the CVAE. The additional fee therefore amounts to €38.07. In total, the company must pay a overall amount of €450.57.

The company liable for the EEVC must pay it on its own initiative, it does not receive a tax assessment.

Payment terms vary by amount of CVAE paid in the previous year by the company. The threshold is set to €1,500.

CVAE less than or equal to €1,500

The EFA shall be paid all at once by remote regulation on the online tax account of the company when carrying out the statement of settlement and adjustment (also called final liquidation of CVAE), via form No 1329-DEF.

This declaration shall take place no later than the 2nde working day following 1er May of the year following the year of taxation.

Declaration of liquidation and regularization of CVAE - form n°1329-DEF

Example :

The CVAE due under 2023 must be paid by teleregulation by 3 May 2024.

Of specific time limits shall apply in the following cases:

  • Within 60 days of universal inheritance
  • Within 60 days of cessation of activity during the year
  • Within 60 days of the decision to open a collective proceeding (safeguard, remedy or liquidation), unless the opening of the proceeding does not terminate the activity.
CVAE over €1,500

The EFA shall be paid in 2 installments by remote regulation on the online tax account of the company, via deposit statement No. 1329-AC-SD:

  • one first down payment equal to 50% of the CVAE due by June 15 of the taxation year
  • one second installment equal to 50% of the CVAE due by September 15 of the taxation year

Example :

A company paid €4,800 of CVAE in 2022. In 2023, it must therefore pay its CVAE in the form of 2 down payments : one on 15 June 2023 and one on 15 September 2023.

In the event of a surplus resulting from an overpayment of advance payments, this is refunded by the tax authorities, after deduction of any other direct taxes due.

In addition, the company must carry out a statement of settlement and adjustment (also called final liquidation of CVAE), via form No 1329-DEF. This declaration shall be made on the online tax account no later than 2e working day following 1er May of the year following the year of taxation.

CVAE Deposit Statement - Form n°1329-AC-SD

Declaration of liquidation and regularization of CVAE - form n°1329-DEF

Of specific time limits shall apply for this declaration in the following cases:

  • Within 60 days of universal inheritance
  • Within 60 days of cessation of activity during the year
  • Within 60 days of the decision to open a collective proceeding (safeguard, remedy or liquidation), unless the opening of the proceeding does not terminate the activity.

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