I’m not understanding this! If you are not TVA registered, then you can neither charge TVA on the price of your goods and services ( on behalf of the impots) nor claim it back on your purchases. Conversely, if being TVA registered entitles you to claim back TVA on your purchases, then surely, you will be expected to charge it on all your sales? How can you dip in and out of TVA registration to suit specific purchases? To avoid being charged double vat/tva, shouldn’t the goods be bought for export from the UK net of VAT and then TVA be paid on import into France?
correct.
also correct
I believe that to be the case too.
Your price in France will be TVA inclusive - it is required that you indicate that on your invoice by law. (sold to a TVA registered enterprise, they would not be ale to reclaim the TVA in consequence).
if it’s exported and sold as such then is it VATable?
Just to add it’s important not to mix together the different business regimes and tax situations.
In the case of an AE type structure, non TVA, you do not account for your purchases only your sales against two indicators - services and resale of goods - each has a different tax rate. Profit per se is not accounted for, only the total of sales against each category.
The simplest, accountants way of explaining how this works in a traditional trading company (not AE type) is by setting up what accountants/book keepers call simple T accounts - Debits on side and Credits the other side.
After each transaction, the Trial Balance should balance between Drs and Crs so it becomes more clear to view the structure.
if as an AE, it is immaterial as no account is taken of the TVA status of the item (as indicated in the above post).
Just to be clear, receiving a numéro TVA intracommuntaire does’t automatically make you TVA liable with the Fisc as a microentreprise (AE-style as Graham called it). It is just acting as an internationally traceable business number. It acts as evidence of the legitimacy of your company. It can also be used in place of registering on the RCS (le greffe) for your dealings with French companies though some traditional French companies still won’t work with AEs if they are not on the greffe.
If you do want to reclaim and pay TVA, you’ll need to inform you local SIE. You’ll need to do this when you pass the revenue thresholds, but you can also do it before reaching those limits if you think it is a benefit.
I had a conversation with another forum member who said that for them (reselling goods), it was simpler to just sign up and deal with TVA right from the start.
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UPDATE - It turned out that I had paid VAT because the order somehow had UK on it, when I spoke to the company they said that they shouldn’t have charged me VAT and refunded it. I have now paid the VAT and charges to DHL and they don’t seem to need a VAT number from me any more.
BUT - I had already applied for a TVA intracommuntaire on line and today I received this reply…
“Vous n’avez pas de numéro de TVA intracommunautaire puisque votre régime de TVA est la franchise en base de TVA.”
I’m not sure what this means, do I need an intra-community VAT Number
I am an autoentrepreneur, I do not charge VAT when I sell in Europe and UK, when I sell into UK under £135 I sell through Etsy and they collect the VAT, if the sale is over £135 the VAT is collected in the UK, I pay VAT when I buy things and and when I import things (I don’t claim it back).
Sorry for the late reply, at face value, it translates to.: you don’t have a VAT number since you are under the limit for being VAT liable.
It seems like there might have been some confusion at the SIE about what you were requesting. On the topic of TVA on sale of goods, I have no experience. I have only dealt with TVA on services, but Graham’s post above seems to deal with.
Try this pro forma letter
For the first section you would tick the option “assujeti non redevable” and then whichever matches your situation.
Hi Carti. I am in a similar situation as you and I was wondering if I could get your opinion on this. I just started my activity and I am preparing an invoice and learnt about the fact that I need to have an intra-community VAT number to be able to invoice other European countries. I just opened my professional space on impots but I still need to wait for their mail in order to be able to fully activate my account.
In this case, can I still invoice my client by adding ‘En attente du N° TVA’ to my current invoice? What are the next steps regarding this invoice in this case?
Hi Abbas, paperwork-wise the easiest is to wait until you have got your professional online impot account open and then used the proforma letter that Sandcastle mentions above (I used the very same btw), and then to issue the invoice.
It all depends on how urgently you need to get paid, I guess. If you do issue an invoice now without it, you can do two things 1) nothing and play the odds that you won’t get audited and if in the unlikely event that you do, they will only fine you a couple of hundred for the small invoice error (according to my accountant), or 2) when you finally have the TVA number, issue an ‘avoir’ that cancels the invoice 001 and then reissue the invoice as 002 (or whatever is the next invoicing number in sequence). As you’ll know, invoices once issued can’t be destroyed or re-edited, they must be cancelled and replaced by a new one.
I had to issue 22 avoirs because of invoicing errors that went back 2 years. For most of the avoirs and reissued invoices, I didn’t sent them to the clients as they were French clients and the impacts were minimal. However, in this case for an international client, I would.
I hope this helps
The last thing to grapple with is declaring this income with the Douane. For that, I don’t have the necessary answers.
This explains it to some degree. There are two types of decalrations… DEB (for sale/purchase of items) and DES (for sale and purchase of services) - if you are a micro-entrepreneur who is below the TVA cut off, then according to this page above, you don’t need to do anything.
In all cases with micro-entrepreneur advise online, its always worth double checking. Some of it is a bit dubious
Re:editing here because of my poor memory - it was a couple of years since I last issued an invoice - you can do TVA autoliquidation to simplify the billing between countries
Re:re:editing, actually, I think you can only do autoliquidation if your micro-entreprise is subject to charging TVA. Not wanting to confuse the situation anymore, I will stop writing.
Hi Carti, I really appreciate your responses! They are really really helpful. I already sent an email to the tax office by filling out the proforma and explaining the situation so hopefully they respond soon. Otherwise I will do like you said by issuing an avoir later on but I will try to avoid this as much as possible.
By the way, when you mentioned this avoir theme, I went back to myAE.fr to check because I previously issued an invoice (without sending it to the client) and then canceled it because of the realization that I need to have TVA number first. When I am checking now, I see this on the avoir section. Therefore the number 001 is already used so the new invoice will start with 002. In this case, do you need to do something about this canceled invoice or do I just keep a record of it in case of audit and do nothing else since I did not even send the invoice to the client.
Yeah regarding the declaring with the Douane, I am also confused about the fact that do I need to fill DES (i am proving services) everytime I issue a new invoice (some places I see that before the first 10 days of the following month) or do I not need to do anything else since I am automatically tax exempt? On the proforma letter I filled, I already declare by saying that I understand that I will have to declare DES so it is all confusing.
Again thanks a lot for your input, I really appreciate it!
Hi Abbas,
I never used any officially recognised software for my billing, so perhaps my experience is a little different to yours with myAE.fr . My recollection is that I was advised to keep paper copies of every invoice and avoir. In addition, if you are not using some specific type of accounting software, you will need to keep a book ledger that lists every invoice and avoir, both of which would be checked in case of audit.
The situation with douane and the DES, I never satisfactorily got to a conclusive answer. Looking back, my accountant said to just state ‘autoliquadation par le preneur’ and to invoice hors taxes amounts, but because it was correcting an error of not declaring , I never figured out what I should do as part of the correct procedure. Perhaps the collective wisdom of SF will help?
I am in the UK so the rules may be different, but what I do with invoices and credit notes etc is enter them in a spreadsheet as I issue them - if an invoice is cancelled then I just note that in the “date paid” column.
I need to keep these records in order to work out my tax so it’s no extra work.
Ummm… the correct way to cancel an invoice, even if issued in error, is a credit note?
Yes agreed if the invoice has already been paid? With an unpaid invoice you can just cancel it.
My accountant has never objected to me just writing “CXL” in the payment column in my invoices spreadsheet. Maybe it’s different in France, I don’t know.
Should still, really, issue a credit note even if unpaid/mistake.
It leads to a cleaner audit trail, you can put in the description on the credit note why it’s issued, you then have everything clear as transaction then balancing transaction. A bit like why double entry bookkeeping helps things be understood later by anyone easier and can help problems be identified easier. You can issue a credit note without sending it to the person. Though they might want something from you (even a note you’re cancelling the invoice) in writing to document their own balancing transaction, if they’re as boring as me.
Having the counterbalancing transaction can make things crystal clear immdiately, say, if the VAT inspector or HMRC starts asking questions years later if they think things don’t match. Such as your invoice value having been taken off the other business’s profits as a cost, in a year several years back, reducing their tax paid on profits that year but this revenue not traceable in your accounts if someone’s getting audited…
Yes you might have a note of invoice cancellation. But a cancelling transaction (credit note, in this case) is so much stronger, more reliable, more resilient and easily findable as proof without having to look much further. Whether in manually kept accounts online or in a system.
Having a pedantic moment as a somewhat frustrating day yesterday… It’s either this or my task list that I should be doing to try to catch up… I’ve bored everyone so really will have to go do garden tasks now.
Hey Carti. I still did not hear back from them regarding the VAT number so I wanted to get your opinion in the following:
If I issue the invoice now and then make an avoir once I have my VAT number, what is the correct step:
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By making avoir, I just amend the invoice I issued and add the VAT number;
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I cancel the invoice and issue a second one. In this case, what would be the date of the second invoice (the same date as the canceled one??) and What would happen if by the time i do cancel the first invoice but I already received the funds?
What was your experience on issuing avoir? First or second method?
Thanks in advance!