VAT, or Value Added Tax, is an indirect tax on consumption at the standard rate of 20%. It is the final consumer who pays VAT when he purchases a good or service. Companies are not subject to this tax but act as an intermediary between the State and the customer.

• What is the VAT collected?

You charge VAT to your customers: this is called collected VAT. Your customers will pay you VAT. You will therefore collect it and then donate it to the State.

• Deductible VAT: what is it?

When you pay an invoice, you pay your suppliers VAT, which the state agrees to reimburse you. This is called deductible VAT. You will be able to deduct it from the VAT that you have collected, before paying the latter to the state.

• VAT payable: what is it?

The VAT payable: it is the difference between output VAT and input VAT.

• What are the different VAT regimes?

The VAT regime defines the terms of payment of the VAT payable.

• There are three of them. You can pay VAT monthly, quarterly, or once a year depending on the size of your business (turnover):
• Implications
• VAT deductible
• Simplified real regime

You are not required to report VAT monthly, but payment is due semi-annually. It is done in the form of provisional down payments, then by an adjustment with the CA12 (annual declaration of VAT regularization). Get it all well calculated with the business calculator now.

• Normal diet

Make your choice: if your turnover is less than € 33,200 or € 82,800, you can request to switch to real (normal or simplified). Likewise, if you are subject to the real simplified regime, you can request to switch to the real normal. Note that the opposite is not possible.

To find out more about VAT , its applications, rates, regulations, deductions, a complete file is at your disposal (on request from our advisers).

This paper reviews the fundamental weaknesses and practices of the current regime. He also reports the many criticisms raised by the economy as well as the widespread malaise of businesses with regard to VAT. On which, the Federal Department of Finance promised to act quickly. Adding words to words, he immediately brought various appreciable simplifications of the practice and significantly modified the ordinance in favor of companies (abolition of tax deductions for purely formal reasons, art. 45 of the ordinance on VAT). The Federal Council has, finally, announced a project for a total revision of the VAT law, which was put for consultation in February 2007.

• Simplicity, legal certainty and competitive neutrality

The overhaul will not come into effect for several years and it is not yet certain that the announced project can really see the light of day. By proposing this reform, the Federal Council intends to greatly simplify VAT, grant taxable persons the greatest possible legal certainty, increase transparency and refocus the administration on its main interlocutors in the matter.