Commercial Taxes in the Ways You Would Expect

Commercial Taxes

Trading with another European country implies the possession of an intra-community VAT number. This number is useful for several reasons. Find out more in the rest of this article.

Intra-community VAT: what is it?

Issued by the tax authorities, the intra-community VAT number is used when you carry out commercial transactions with a country in the euro zone . The importance of the intra-community VAT number is that it will be useful for most of your customs procedures, but also for the payment and reimbursement of VAT. The number format is as follows: FR + 2-digit code + SIRET.

How is the intra-community VAT number obtained?

Following the creation of your company, the tax authorities automatically send you an intra-community VAT number if you are subject to VAT in France. On the other hand, if you benefit from another tax regime, it is up to you to express the request. Make use of the in that case.

Where does the intra-community VAT number appear?

It must appear on your invoices as well as on your VAT returns. That of your foreign customer must also appear on your invoice.

More details on the usefulness of intra-community VAT

When you sell a good to a customer in the euro zone (outside France), while indicating the intra-community VAT numbers of the two parties (seller / buyer) on the invoice, you will benefit from a VAT exemption . This is roughly the same as selling your property tax-free.

Also, when importing a good from a European state to France, you should normally pay VAT in the seller’s country. Exceptionally, intra-community VAT will allow you to buy the property at its price excluding tax and to pay after French VAT. This saves money when you import goods from a country where the VAT rate is higher than in France. It is therefore an important aspect to take into account for business management . However, to take advantage of these advantages, both parties must be subject to VAT.

As a taxable person (self-employed or company), you have to pay the VAT that you have collected from your customers each month or quarter and can deduct the VAT that you yourself have paid. It is therefore important to know when the VAT becomes chargeable. Is it when you receive a deposit, when you issue an invoice or when the customer pays? We will look at this issue from a supplier / service provider perspective.

Payment, invoice, chargeable event

Between 2013 and 2015, the VAT liability was mainly attached to the time of the occurrence of the event giving rise to the tax, that is to say in principle at the time of the delivery of the good or the provision of services (we do not speak for the moment of cases of intra-community deliveries and acquisitions, nor of imports).