In this situation, it is advisable for the company to opt for the real normal Sales tax regime or the mini-real regime, which will allow you to quickly recover the Sales tax on investments. However, one surely needs to know how to calculate sales tax.
How to choose the company’s Sales tax regime?
The choice of Sales tax regime is materialized on:
- The declaration of incorporation or M0 form, in the context of the creation of a company.
- The declaration of creation of a sole proprietorship or form P0, in the address of the creation of an activity in own name.
- In addition, following the creation of your company, the tax service sends you a letter which summarizes your tax choices.
Your company is subject to many tax deadlines related to your legal status and your tax regime: taxation of your profits, Sales tax, CET, payroll taxes, etc. It is important to know the taxes and duties that concern you in order to forecast your tax charges and anticipate your reporting and payment obligations.
Taxation of profits
All businesses are taxed on their profits. Depending on your legal status (sole proprietorship or companies), you will be subject to income tax (IR) or corporation tax (IS).
Sole proprietorship (craftsmen, traders), liberal professions and EURL (sole proprietorship with limited liability) are automatically subject to the IR (certain companies, such as SARL, SAS or SA, may fall under the IR optional). To determine the tax base, the actual costs of the business are deducted from the turnover (businesses subject to the micro-business regime benefit from a standard allowance). The profit is then integrated into the income of the tax household of the entrepreneur.
Companies (SARL, SAS, SA, etc.) are automatically subject to IS (EURL and EIRL can be subject to IS on option). The tax base is determined after deduction of the real costs of the company. It is the company that is liable for the corporate tax . The directors or partners are not personally taxed, for income tax purposes, except on the remuneration or dividends paid to them.
Companies collect Sales tax on behalf of the State: they invoice it to their customers and then pay it back to the State, after deduction of the Sales tax which they have paid themselves during purchases or investments.
The Sales tax tax regime is determined according to your activity and your turnover:
The basic franchise regime
The company is not liable for Sales tax. It has no declarative obligation to fulfill. It invoices its customers free of Sales tax and has no Sales tax to pay back to the State on its sales. In return, it cannot deduct the Sales tax paid on its purchases or investments. This plan is available to companies whose turnover does not exceed € 85,800 for purchase-resale activities and € 34,400 for service provision activities;