Hi, My wife needs some advice. She has been offered some consulting work for 6 months. If she accepts, this would push her over the TVA threshold this year (2021) by about 4,500 euros - but then she is unlikely to meet the TVA threshold for all the years after this. Do they take this into account at all? Otherwise, she will have to declare TVA on very little income for every year after. TIA
I’m no expert on TVA, but I think there is a small tolerance but no idea how much. Also, bearing in mind the tax year restarts Jan 1st, would it not be possible to split invoices over this and next year?
2 Likes
There is a chatbot on the URSSAF AE site. Ask him/her/it
2 Likes
This answers your question:
A very similar question was asked about 3 days ago.
IIRC others’ replies said there is a tolerance of around 2,000 euros definitely less than 3,000 euros past the threshold for 1 or 2 years.
But remember the French tax year is calendar year based. So surely if she invoivces 4 or 5k this year, from Jan it’s a new year.
Watch out if Chambre des Metiers or any other signup needed requiring fees or cotisations, look into social charges etc, Tory enclosed some great stuff on another recent thread to someone planning to live in France and work technically elsewhere. There is some overlap and a good look round the microentrepreneur category here might throw up other things.
Separately if her physical presence is required for more than 90/ any 180 days in the year for any combination of reasons then is she needing a residence permit or visa as well?
It talks about the thresholds before TVA is required, but still doesn’t explain once registered for TVA what might happen the following year is one’s’ turnover drops. France being France it will either be massively straightforward, or massively complicated!
Did you ever get clarity on whether one can de-register from TVA (and how) when annual turnover falls below the threshold? I have searched high and low for an answer without success.
Have you tried writing to your office of impĂ´ts des entreprises to ask them to erase yiu from the lists?
The Plan Loi Finance voted in assembly yesterday, and it seems they’re modifying article 293b to drop the threshold for micro-enterprises to just 25,000 euros (both sales of goods, and service based) before forcing VAT registration.
1 Like
I’m somewhat in favour of this (or even making all businesses however small register for VAT / TVA) - I know it would mean more admin (and probably more fonctionnaires!) but having a VAT threshold actually makes it hard for small businesses to expand - once they get to the VAT threshold they have to make a fairly big jump in turnover to make the same money as when they were not charging VAT, since they will now be charging their customers 20% more so are bound to lose some.
(Unless it’s a business where all their customers are also VAT-registered businesses, but I think it’s fair to say that most small businesses are oriented towards non-VAT-registered retail customers).
As a result many actively try to keep their turnover down in order to avoid charging VAT - I know that’s true of many photographers who tend to be sole traders selling to consumers.
Also maybe then the rate of VAT/TVA could come down as more would be being collected? (A vain hope I know). 
Still a way to go then if not through the Senat.
Actually, the aim with the move to electronic invoicing is that it should allow the administration to reduce the number of staff, as everything will be electronic and registered in the FEC (fichier d’écritures comptable) which can simply be plugged into DGFIPs analysis software to detect any “anomalies”. This is what my accountant has been telling me for the past 3 years. Unfortunately, the full move to all electronic invoicing keeps getting pushed back because the governmental software stack still can’t fully cope with the myriad of circumstances (exceptions) that exist under French tax law, and has an even harder time of talking to non-French systems due to a lack of commonly imposed standard implementations.
If only ! 
Yes, just confirmed on the lunchtime news. Down to the lower amount.
Thanks for the confirmation Shiba.
I believe there’s also no tolerance, so if you go just a euro over the threshold, you’ll be liable for VAT collection that month.
I’m assuming (and maybe wrongly) that the VAT threshold is calculated over a calendar year (Jan 1st - Dec 31st) and not on a rolling year basis?
When we were TVA registered it was trimestres that counted but that was a long time ago now, things have moved on and we are talking a lot more in turnover than an AE business which we would do in one trimestre.
Thanks Shiba, I know very little about TVA registration, apart from the general basics, but I believe it requires quarterly returns… The problem with the new threshold is it’s great if you can smash far past the barrier, and find time for the additional record keeping, and using an accountant, but for anyone who can only get past it by a fraction, it would be a terrible burden and expensive, and on a threshold of 25k you could have all that hassle and be making a lot less than minimum wage.
I suspect that the fisc are trying to rein in those who are running full time businesses under the auto/micro entrepreneur scheme. It was never intended to become what it has ended up being; it was a way of making a side hussle/hobby business legal, but it got jumped on by many as it’s clearly less onerous than running a régime réel.
You don’t have to use one. I was TVA registered for years & self accounted throughout.
TVA isn’t hard if you understand even basic booking keeping which, clearly, anyone running a business should.
The only TVA issue I had was when the fisc couldn’t cope with me only paying them the difference between the TVA I’d charged (output tax) & the TVA I was claiming back on business costs & purchases (input tax). They wanted me to pay them in full so I could then be refunded the input tax later. I got called into the tax office to explain myself, but once I introduced the concept off offsetting things they backed off & agreed it was a better way of doing it 
I understand the micro-business is not great for anyone who wants to expand their business, but not everybody can sail past the thresholds, and it certainly seems gets harder every year.
Also if you have revenue from other means, and you don’t require or have the time for a full time, VAT registered business, then the micro-enterprise is a great supplement.
I suppose it’s a bridge I’ll cross if I ever get there, although I’m not intending to break the threshold unless I think I can push clearly through it and have the time to commit. As I’ve never seen the quarterly return forms for VAT, I’ve no idea how easy or complicated it might be. I daresay if an accountant did the first quarterly return, it would be relatively simple to ensure the subsequent ones were done correctly.
If they allowed you to offset, I’m surprised that they were surprised by it. Glad you didn’t get into any hot water! 
I opted to settle up yearly.
The opposite. Despite the worrying summons I was treated as their better; forelocks were almost tugged! #notnormalinfrance
1 Like