When the company sells a good, it recovers the Sales tax which it must then pay back to the Public Treasury. Collection and deduction are the essential cogs in the operation of Sales tax. The terms of this repayment depend on the Sales tax regime applicable to the company.
A company subject to the actual normal tax regime must provide a CA3 declaration each month. This declaration must specify all the transactions carried out and all the taxable transactions for the previous month.
A company subject to the real simplified tax regime must pay Sales tax in two annual installments. Sales tax is therefore calculated in relation to the previous year and adjustments are made thereafter. The company must pay a CA12 declaration. The use of the taxfyle.com/sales-tax-calculator is important there.
Sales tax deduction
The proper functioning of Sales tax presupposes that the company can deduct the Sales tax it has paid for its taxable transactions.
The company then proceeds to an imputation between the collected Sales tax and the deductible Sales tax. When imputation is impossible, the company can obtain reimbursement.
The right advice:
The advisability of opting for the submission of an activity to Sales tax (see above) must be assessed with regard to the right to deduct. Indeed, when the entrepreneur incurs expenses for this activity, it may be interesting to opt for Sales tax to allow the deduction of Sales tax.
In return, the company will offer sales and services including Sales tax to its customers, which may represent a drop in competitiveness, especially when the latter are individuals (since they themselves will not be able to deduct Sales tax).
To be deductible, Sales tax must:
Payable to the co-contracting party
To relate to a good or a service in the interest of the company (the goods for which the company deducts the Sales tax must be useful for the exploitation)
The company realizes, over a month, sales of goods up to 100,000 euros excluding tax. The company acquired raw materials for 65,000 euros before tax. It also acquired a vehicle for 12,000 euros excluding tax. This vehicle will be used up to 30% for personal purposes. Sales tax is subject to the common law rate.
In this situation:
The Sales tax collected on the sale of goods will be 20,000 euros (100,000 / 20%),
The Sales tax deducted for the purchase of raw materials will be 13,000 euros (65,000 x 20%),
The Sales tax deducted for the purchase of the vehicle will be 1,680 euros (12,000 x 20% x 70%).
Ultimately, the company will have to pay the Treasury 5,320 euros (20,000 – (13,000 + 1,680)).
Not all goods can give rise to Sales tax deduction . Indeed, the right to deduct may be only partial (example: the deduction of Sales tax on diesel fuel can only be done up to 80%) or may even be prohibited (for example, for goods used for more than 90% for private purposes).