VAT declaration and payment
Verified 01 January 2023 - Legal and Administrative Information Directorate (Prime Minister), Ministry of Finance
VAT payable on receipt of the advance payment
Published on 1 January 2023
Since 1er january 2023, VAT is chargeable on receipt of payments on account for the supply of goods.
Companies who purchase goods and receive prepayment invoices can thus deduct VAT immediately without waiting for the receipt of the final invoice.
Sales and services are subject to the value added tax (VAT) VAT is collected by the trader who has to remit it it to the tax authorities. For taxable transactions, tax is calculated on the price excluding tax at different rates. The tax regime (standard or simplified) depends on the amount of turnover achieved by the company and the amount of VAT payable annually.
You declare less than €15,000 in VAT per year
The simplified real scheme reduces the reporting and payment obligations of companies below the thresholds. The declaration is annual and the payment is half-yearly.
Companies not benefiting from basic deductible VAT may be eligible for the simplified tax system (SIR) allowing them toreduce their reporting and payment obligations.
In order to benefit from this, companies must have an annual turnover excluding tax (CAHT) of between:
- €36,800 and €254,000 for services and liberal professions under NCOs and BICs
- €91,900 and €840,000 for business activities and accommodation (hotels, bed and breakfasts, cottages, furnished tourism in particular).
In addition, the annual amount of VAT payable must be less than €15,000.
FYI
this scheme is applicable to companies that meet the turnover requirements, irrespective of their tax regime (business tax or income tax in the BIC or BNC category).
Each value-added operation is separate and independent. It follows specific rules depending on its main or ancillary elements.
It is considered that there is a single operation when the elements are so closely linked that they form an inseparable whole. If an element is ancillary to one or more elements, then it is part of the same operation as these elements.
The extent of the transaction and its added value are determined from the consumer's point of view.
The following two criteria must be taken into account:
- Qualitative and quantitative importance of the various elements involved
- Elements of the circumstances in which the transaction takes place
If a transaction includes elements which are not ancillary and which are subject to different VAT, then the applicable rate shall be the highest rate.
FYI
the single service provision follows specific rules, the different elements for the realization of a journey are considered as part of the same operation.
The declaration is used to summarize all transactions taxable for VAT in the previous year and to determine the basis for calculating the advance payments for the following year.
The VAT recapitulative statement is not required where the transactions concerned by VAT are supplies of goods and the VAT exemption is the recipient (customer).
The simplified declaration shall be made on an annual basis by 2e working day following 1er May, using Form 3517-S-SD:
Annual VAT adjustment declaration - Simplified scheme
Please note
if the financial year does not correspond to the calendar year, the declaration must be made within 3 months of its closure.
VAT must be paid by 2 half-yearly installments. They are calculated on the basis of the VAT due in the previous year:
- 55% in July, to be entered on line 57 (last page of form 3517-S-SD, heading "Basis for calculating installments due for the following financial year"),
- 40% in December.
The payment is made online to your tax account.
Online tax account for professionals (EFI mode)
FYI
if the VAT due in the previous year is less than €1,000, the company shall not be required to make advance payments. VAT shall be paid for the whole year at the time of the annual declaration.
If the turnover thresholds are exceeded, the simplified scheme shall be maintained during the year of the excess if the turnover does not exceed:
- €287,000 for the provision of services,
- €925,000 for the supply of goods, sale for consumption on the spot and accommodation services.
If these amounts are exceeded, the simplified scheme shall end immediately. The company has been considered to fall under the standard VAT system since 1er the day of the current fiscal year.
The month following the month of the exceedance, the company must file a Declaration No. 3310-CA3. It summarizes the operations carried out from the beginning of the financial year to the month in which the excess was exceeded.
Example :
If a company selling goods achieves in 2022 a net turnover of €800,000, it continues to be covered by the simplified VAT scheme for 2022. But if it achieves an HT turnover of €972,000 in 2023, it will no longer be covered by this scheme.
You declare more than €15,000 in VAT per year
The normal real speed allows companies above the thresholds to declare and pay VAT. Reporting and payment are monthly.
The ordinary real scheme concerns companies liable for VAT whose turnover excluding VAT is higher than:
- €254,000 for the provision of services,
- €840,000 for trading and providing housing.
This regime also applies to companies that report more than €15,000 VAT per year. This applies even if their VAT is within the threshold of the simplified tax system.
Each value-added operation is separate and independent. It follows specific rules depending on its main or ancillary elements.
It is considered that there is a single operation when the elements are so closely linked that they form an inseparable whole. If an element is ancillary to one or more elements, then it is part of the same operation as these elements.
The extent of the transaction and its added value are determined from the consumer's point of view.
The following criteria must be taken into account:
- Qualitative and quantitative importance of the various elements involved
- Elements of the circumstances in which the transaction takes place
If a transaction includes elements which are not ancillary and which are subject to different VAT, then the applicable rate shall be the highest rate.
FYI
the single service provision follows specific rules, the different elements for the realization of a journey are considered as part of the same operation.
The companies subject to the ordinary actual arrangements must declare each month the VAT which became chargeable during the previous month. Payment is made online:
Online tax account for professionals (EFI mode)
FYI
if the VAT paid each year is less than €4,000However, it is possible to declare and pay quarterly.
Conditions for the declaration of revenue
Simplified system of taxation
Online service
Online service
FAQ
Ministry of Finance