Depending on the characteristics of your project, it will be more appropriate to move towards a Sales tax regime. However, it is still necessary that the size of your company leaves you the choice at this level.
We are going to present four cases that we come across frequently and give you our advice on the opportune choice to make with regard to Sales tax. You need to know how to calculate sales tax there.
Small B to C activity and low costs with Sales tax
It often happens that certain entrepreneurs create an activity in the context of which they will mainly address themselves to individuals and will have very little cost to bear.
If the activity is reduced, the Sales tax exemption regime is a real opportunity in this case:
The private customer, who does not recover the Sales tax, resonates only in Sales tax and you will be able to be more competitive than the companies subject to the Sales tax,
You will not have to make any Sales tax declaration.
Activity that generates Sales tax credits
In view of the tax rules which govern them, certain activities frequently place the company in a situation of Sales tax credit.
This is for example the case:
In certain building sectors where materials are purchased at the standard rate of Sales tax and customers invoiced at the reduced rate of Sales tax,
Or for companies which buy their goods in France and which have a large part of their activity carried out for export.
If you are in this situation, it is better to opt for the real normal Sales tax regime or the mini real regime, which will allow you to recover the Sales tax credits quickly.
Activity that generates Sales tax payable
Many companies also have an activity which causes an excess of collected Sales tax to be returned to the State. The company therefore has a cash outflow to expect when filing the Sales tax return.
When the size of the company and the amount of Sales tax to be paid allow it, it may be appropriate to opt for the real simplified Sales tax regime or the real normal (or mini-real) regime with filing of a quarterly declaration.
Indeed, this will allow you to extend the payment period relating to the balance of Sales tax to be transferred and possibly to place this amount in a remunerated investment until the declaration is established.
Note: some entrepreneurs prefer to declare and quickly pay the amount of Sales tax to be remitted to the State.
Making large investments at the start
Some projects involve making large investments to start the activity. Often these investments will be subject to Sales tax and the new business therefore incurs a cost exclusive of Sales tax plus Sales tax.
If the investments are subject to the normal rate of Sales tax, this means that the company must also pay the supplier an amount equal to 20% of the exclusive Sales tax for Sales tax (to arrive at the TTC).