All companies subject to VAT must declare and remit, at a certain frequency (monthly, quarterly or annually), the collected VAT that they invoice from their customers when it becomes payable.
The due date of the collected VAT depends on the business sector of the company and, where applicable, the options formulated. Two systems are possible: payment of VAT according to debits and payment of VAT according to receipts.
VAT on debits and VAT on receipts
The payment of VAT according to debits
Payment of VAT based on debits means that the collected VAT is due from the date of issue of the invoice. For that make the right calculation results with the taxfyle’s tax calculator now.
All operations carried out by the company, with the exception of the provision of services, real estate works and transfers or concessions of intangible movable property ( see below ), are to be declared with the VAT system according to the flows.
In practice, the company risks suffering a negative cash flow mismatch linked to the VAT collected when its customers pay the invoices at a later date than the date of declaration and payment of VAT relating to these same invoices. If this is the case, the company “advances” the collected VATS to the State and then recovers it from its customers.
Large and occasional invoicing can be financially detrimental to the business if no deposit has been claimed.
Professionals who, depending on their activity, are required to pay VAT collected according to debits have no other possible option, they cannot opt for the payment of VAT according to collections.
The payment of VAT according to the receipts
Payment of VAT based on receipts means that the collected VAT is payable when the down payments and the price are collected. Thus, the company does not return the VAT collected to the State until the customer has paid all or part of the amount due.
VAT is payable according to collections for all of the following transactions:
The provision of services,
The real work and transfers or concessions of intangible movable property (patents , trademarks, etc.), the latter being considered as the provision of services.
Sales to be consumed on site are considered to be the provision of services.
Here are some details on the due date:
For payments by check: VAT is payable as of the physical delivery of the check. If the check is not provisioned, the company can charge the amount declared on its next VAT return,
For payments by bank transfer: VAT is payable as of registration on the bank account,
For payments in cash: VAT is payable as of the remittance of the cash,
For payments by bill of exchange: VAT is payable from the payment of the bill.