Tuesday, September 26, 2023

The operation of the simplified real regime in Sales Tax

The company subject to the real simplified regime has only one declaration to make per year: the CA12 declaration. In addition, it pays two half-yearly installments during the year: in July and in December. The July deposit corresponds to 55% of the Sales tax due for the previous year. The December deposit represents 40% of this amount.

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The down payments can be modulated if the company considers that they are too high in view of its forecast turnover. Making use of the free sales tax calculator is important.

The regularization occurs with the filing of the CA12 declaration. The company must on this occasion pay the balance if the down payments are insufficient. Otherwise, the excess is refunded, or charged to the next deposit.

Other corporate taxes: local direct taxation

In addition to profit tax and Sales tax, businesses are subject to local taxes. This is the case of the territorial economic contribution, ancestor of the professional tax, which brings together CFE and CVAE.

Businesses owning premises are also liable for property tax.

The territorial economic contribution

The CET was instituted to replace the professional tax by the 2010 finance law. Collected by local authorities, it is made up of two taxes: the CFE and the CVAE.

The business property contribution

The CFE is based on the rental value of real estate subject to property tax and used by the company within the framework of its activity: offices, shops, etc.

There are certain cases of exemption from the CFE. For example, the CFE is not due for the first calendar year of activity. Certain activities are also subject to a permanent exemption.

The amount of the CFE varies according to the municipalities. Some cities are more expensive than others for businesses.

The contribution on the added value of companies (CVAE)

  • The CVAE is calculated based on the added value produced by the company and allocated to local authorities.
  • The CVAE is due by any company generating an annual turnover of more than € 500,000.
  • In addition, companies generating a turnover of more than 152,000 € must declare the added value and the number of employees. This training helps to better distribute the CVAE between the local authorities.
  • The CVAE rate is 1.5% of the added value produced. However, a reduction is in place for companies generating less than 50 million euros in turnover excluding tax.

Business property tax

The law does not distinguish according to whether the landowner is an individual or a company. The ownership of real estate or land generates the annual payment of property tax. This tax is payable by the owner of the land at 1 st January of the tax year.