How to avoid classic pitfalls when making your VAT return ? VAT is a tax levied by companies and paid back to the public treasury. Unless you are VAT free , your business is affected. An intra-community number is assigned to you for this purpose. Whether you are under simplified or real scheme , VAT credit and VAT payable must be calculated correctly, following the accounting obligations to be complied with.
Mistakes to avoid:
Mistake 1: Making the VAT declaration out of time
Mistake 2: Getting the wrong rate
Mistake 3: Miscalculations and omissions
Mistake 4: Badly Anticipated the period of holidays
Mistake 5: Make the VAT declaration rounded up or down
Mistake No. 1: Making The VAT Declaration Out of Time
When should the VAT return be made? It's simple: from the month following the transactions submitted to TVA. You have a period of ten days, beyond which a fine of 750 € sanctions you, increased to 1 500 € if the failure persists. Keep in mind that VAT is due when invoicing the transaction and no later than the 15th of the month following this billing.
Mistake No. 2: Getting the Wrong Rate
The basic VAT rate, in force today, is 20%. If it has long been 19.6%, make no mistake: it's past. On the other hand, its percentage always differs according to the sector, the activity or the localization. Thus, for sales associated with the restoration or transport fields, a reduced rate is applied. It is 5.5%, or 2.1% in some cases.
Finally, if the headquarters of your company is located in specific areas, such as Corsica or overseas territories (Overseas Departments and Territories), you may be subject to different rules. By cons, export, regardless of your geographical enclave, your sales are to be made in HT (excluding taxes).
Mistake No. 3: Miscalculations and Omissions
To calculate the deductible VAT, a coefficient applies. It corresponds to the product of three coefficients:
That of subjugation;
That of taxation;
That of admission;
To apply these deduction coefficients, you must know the value of each and apply the formula to your case. Reverse charge situations may be subject to errors. Even when you are both the buyer and the seller and you pay and collect VAT from the same transaction, you must include it in your VAT return. Otherwise a tax fine of 5% of the amount of VAT to be deducted can be claimed under article 1788 A-4 of the CGI (general tax code).
Mistake No. 4: Badly Anticipated Period of Holidays
How should those who declare their VAT monthly and partially close during holidays, for example? The accounting work, with the latest entries, is often not completed and all the elements of the transactions carried out have not always been able to be met. Fortunately, the Treasury is planning an operational facility.
You can in fact make a partial VAT declaration, valid on a provisional basis, provided you match it with the payment of a deposit. This must be at least 80% of the amount actually due, or 80% of the amount paid in the previous period. This gives you additional time to carry out your bookkeeping and calculations - the transitional deposit is paid in the meantime. The following month, you regularize by cumulating the two periods. However, remember to mention it in line 2C of the form. Of course, the problem does not arise for those who have chosen the quarterly VAT return .
Mistake No. 5: Make his VAT Declaration with Rounded Figures
Apart from the case of holidays cited at the moment, it is strictly forbidden to use the same VAT declaration to cover more than one tax period. In the case of an amount to declare equal to zero, it may be tempting to send nothing, but you must complete the form. In this case, you check the "nil" declaration box.
In the same way, it is excluded to do as you please at the rounding. Your amounts and your calculations, when they fall to the nearest cent, are to be transformed according to a well-defined rule: the decimals can be neglected below fifty cents. From and above this threshold, you must round the amount to the higher euro. In summary, how to fill out your VAT return? By scrupulously following the rules!
VAT is the main resource of the state. So his control and supervision are very strict. Given the diversity of its rates and the mechanics of its calculation rules, it is good to use appropriate tools. Different accounting software exists, such as QuickBooks ZEFYR or Fizen and their assisted input tools. In software-as-a-service (SaaS) mode, these software programs are also continuously updated by their respective publishers - a great way to be sure you're up-to-date with the current regulatory framework.