This is a classic case where the company pays the Sales tax before recovering it by making a request. Let us now turn to the case of reverse charge. If you purchased remotely from country, the Sales tax may not be mentioned on the invoice, in which case you will not pay it.
This is the case of reverse charge of Sales tax. The tax will have no impact here on your cash flow, it comes down to a game of entries.
How to account for your intra-community Sales tax? You need to calculate the amount of Sales tax (in this case it is country Sales tax). You must then declare this amount in your accounts. If we use the same diagram as before: purchase for 1000 € and Sales tax at 20%. 1000 € is the price here. The use of state sales tax calculator is important.
What are the basics of the operation of intra-community Sales tax?
The value added tax works in a broadly identical way in the different countries of the European Union. The differences in taxation are to be found in the rates charged and the different categories of goods or services provided.
Key points to remember:
- Intracommunity Sales tax works basically the same way as country Sales tax.
- The reimbursement does not necessarily concern the same expenses as in country depending on the country.
- The right to reimbursement of intra-community Sales tax is established according to the company requesting the reimbursement and the expenses incurred.
- The procedure is completely electronic and takes between 4 and 6 months.
- You must be able to provide proof of payment.
- Make a clear distinction, when processing accounting data, between the cases where the amount is inclusive of Sales tax or excluding Sales tax on the invoice.
- Beneficiaries of the basic franchise may voluntarily submit to Sales tax by exercising an option in favor of Sales tax.
The persons who exercise the option are subject to all the obligations incumbent on those liable for Sales tax. They come under the simplified tax regime or, optionally, the actual normal regime.
The choice to opt for the payment of Sales tax generally depends on the target clientele, the rate applied and the size of the investments. Liberal professionals whose clientele is made up of professionals who are themselves subject to Sales tax (Sales tax neutrality with regard to them), and who have significant investments to make (major work, coating of surfaces) may therefore be in the interest of opting for Sales tax.
The option is possible at any time, and takes effect on the first day of the month in which it is declared. It must be formulated in writing to the tax service of the place of the main establishment.
It is possible to formulate this option from the start of the activity on the P0 PL form, by checking the box “Real simplified” or “Real normal”. Failing this, for the option to take effect from the start of the activity, it must be exercised before the end of the month in which the activity begins, or within 15 days of the start of the activity if the month in which the activity begins, activity is outdated.