In practice, no negative cash flow mismatch linked to the VAT collected affects the company. Professionals carrying out transactions for which VAT is payable according to receipts, however, have the possibility of opting for the payment of VAT according to debits. For this, the request must be made by regular mail to the tax service.

Real estate contractors have the possibility of opting for the payment of VAT upon delivery of the works.

Should VAT be payable on invoices?

Professionals who operate with a collected VAT payable according to the collections must mention it on each of their invoices: “VAT payable according to the collections”.

Professionals who carry out operations falling in principle under the system of VAT payable according to collections and who have opted for the system of VAT payable according to debits must indicate on all the invoices concerned the following statement: “VAT payable according to the flows ”.

Choose between VAT on debits or receipts

First of all, it is important to point out that this choice is limited: only professionals who operate in principle with a VAT payable according to the collections can request to switch to a VAT system payable according to the debits (option formulated for simple mail to the tax service).

Professionals who have a trading activity pay their VAT according to the debits and they have no other possible option. Make use of the same with the taxfyle’s tax calculator  calculation results.

Then:

The payment of VAT according to debits has the advantage of simplifying the management of VAT: it suffices to indicate on the VAT return the amount of turnover invoiced over the period concerned. In return, the company may suffer a negative impact in terms of its cash flow when trade receivables are collected after the repayment of the VAT collected on them.

The payment of VAT receipts from the advantage of avoiding to pay back the VAT collected before clients have paid the bills. No negative impact can therefore be reported in terms of cash flow. On the other hand, the VAT return can be a little more complex to manage.

The real simplified tax regime is intended for industrial or commercial companies which do not cross certain turnover thresholds and which are excluded from the micro regime (open only to individual companies).

The entrepreneurs’ corner shows you how the real simplified regime works in terms of reporting results, accounting obligations and VAT declaration.

Real simplified tax regime

The conditions of the real simplified tax system

The simplified tax regime automatically applies to companies excluded from the micro-BIC regime and provided that their annual turnover excluding tax does not exceed:

  • 818,000 euros for sales and hosting services,
  • 247,000 euros for the provision of services.
  • These thresholds are valid for the years 2020 to 2022.