with our B&B business when we serve dinner we declare this as "prestations de service" and pay tax of 25% on the turnover (the whole sale price of the meal).
My wife has just opened an art galerie (a shop in effect) and her accountant tells her to declare the sales margin (difference between costprice and sales price) rather than turnover.
If this is correct, then should I declare only the sales margin element when seling dinners?
Thank you Brian
You can choose either artist or artisan, part of it is how you define yourself. If in doubt, call URSSAF and explain. What they say is then 'right', so you can't go wrong.
If you are an Artist making children’s clothing with hand painted fabrics/up-cycled materials so they were all one-off original creations and ladies accessories (same all one-off’s) what category of AE would you register under? Anyone know?..
But with AE you can not deduct the cost of anything, that is the whole point of the regime. I just don't get what is so difficult to understand, its a super simple regime to try out a business idea or earn a bit of extra money without getting caught up in the nightmare that is the French business system.
And cannot deduct the cost of the accountant (like one can do in most every other country on the planet!)
That is what I was trying to say earlier but you were more succinct Brian! I don't have much faith in accountants, particularly French ones and particularly ones that try to talk about AE, as we all know that AEs do not need and can not afford, to employ one at all.
Then she would need to be in another regime altogether. The accountant appears to have been talking from an opening other than a mouth.
I am thinking now that the accountant was perhaps meaning that we should open as a "depot de vente" (taking things and selling them on behalf of the owner). In this case I wonder, perhaps then she would be invoicing the seller (the previous owner) - just for her comission; and then paying the social charges on that. This would make more sense I think.
Under all AE rules, social charges are paid on the turnover never the profit. Even for impots they want the total figure to which they apply an 'abattement'.
Unless, I believe there are some special rules rules for authors/artists that he may be thinking about/
If your wife has 'just' opened a shop then it is probably a bit early to be bothering about tax and anyway as an AE she pays social charges on turnover so it is not that, and sales margin has nothing to with anything. Fire the accountant. Anyway AEs do not need accountants, each of the sites we use for any kind of declaration will tell us what we owe when we put in the amounts we are declaring - assuming she is doing it all online. There is little point in paying an accountant for anything, especially because they might get it wrong, which is your fault whereas when the bureaucrats get it wrong they keep shut up as a rule.
yes,of course - I did mean social charges - not tax. Slip of the fingers.
I am now wondering if the accountant was referring to tax rather than social charges when he said to declare the sales margin.
If she is AE she should be declaring the turnover full stop. If she is AE she doesn't need an accountant and the majority of accountants know nothing about the AE system.
Also, when you are AE you pay 'charges sociales' on your turnover not tax! Tax is a totally separate issue.