What is a deductible VAT News-EN

What is it deductible VAT ?

The Value Added Tax (VAT) is a tax on the value of the goods soldôindirect tax on consumption. C’is a tax collected by companies on behalf of the government’State. This means that the’The entirety of this taxôis paid back to the latter. But that’is the deductible VAT ? And precisely, what are the latest developments in national and EU legislation on VAT for e-commerce activities ?

E-commerce VAT: what it is ?

C’is a taxation that is not subject to VAT’The VAT on services and products sold remotely. Reforms have recently been implemented in the online sales sector to improve and simplify the collection of this tax and to limit VAT fraud.

VAT: new reforms from 1 July 2021

Before July 1, 2021, the territoriality of certain operations was subject to a notion of sales threshold before tax, in particular intra-Community distance sales:

  • Transactions subject to VAT in the country of departure, as long as the VAD threshold in the country of departure is not exceeded’s arrival’is not exceeded;
  • Operations subject to VAT in the country of origin’When the threshold for distance selling in the country of destination is reached, the software version is flashing’he arrival is outdated.

As of July 1, 2021, all EU companies established in a single’EU Member State whose aggregate value of intra-EU distance selling and cross-border B2C services is less than 10.000 In the case of online sales, companies can continue to charge the VAT of their country of origin’They are qualified to deal with VAT, customs regulations, and many other issues.

The measure requires that the VAT is due in the country of origin’Member State of destination. C’is an effort of’The harmonization that actually comes from the European directive of December 5, 2017.

Value added tax: a headache that can only be solved with the help of the appropriate authorities’It is necessary to entrust the experts

This desire to’he harmonization manifested by the Community directive and transposed by the 2021 finance law is proof of the complexity of the subject. Clearly, taxation in general and in particular in the’In this case, the one related to online commerce requires the use of a computer’œit of’an expert. The firms of’VAT experts are the best placed to assist companies in the payment of VAT their development to a French supplier’international.

They are qualified to deal with VAT, customs regulations, and many other issues’other crucial questions to operate serenely in compliance with the legislation: click here to learn more about these topics from tax experts.

VAT e-commerce

What is deductible VAT?

We talk about deductible VAT because the value-added tax is based on a collection and deduction mechanism.

When’a French company acquires from the goods with’If the goods are sold to a French supplier, the VAT paid to the latter will be deductible, provided that the supplier is not a French company’The buyer has the ability to justify the realization of the transaction’An operation giving right to deduction (a local sale for example).

When the VAT declaration of the French company states that it is a taxable person, it is not a taxable person’If you have a deductible VAT amount, this amount will be able to be deducted’object of taxation’It is not possible to claim a VAT refund from the competent authorities.

S’It is true that some operations are exempted, but most of them make the operators liable to pay the tax. In France, there are generally three categories of deductible VAT rate.