Independent consultations subject to VAT
Consultants subject to VAT are those who fall under the real simplified regime or the real normal VAT regime.
How should the independent consultant charge VAT to clients?
Services invoiced by an independent consultant subject to VAT are taxed at the standard rate (20%), except when his field of activity falls within the scope of a reduced rate of VAT (which is rare in practice for this activity).
VAT is calculated by applying the tax rate to the total amount excluding tax (HT) of the services invoiced to your customers. The invoice that you give to each customer must mention the applicable VAT rate and the total amount of VAT invoiced.
The customer is required to pay you the total amount inclusive of all taxes (including all taxes) shown on your invoice, which includes the total amount excluding taxes and the total amount of VAT. For the tax refund estimate make use of the tax calculator there.
When does the independent consultant have to declare and pay your VAT?
The frequency of declaration and payment of your VAT depends on the regime on which you depend:
In the real simplified regime: you must declare and pay your VAT annually. Two semi-annual VAT installments must also be paid during the year.
In the real normal regime: you must declare and pay your VAT monthly. When the VAT due does not exceed 4000 euros per year, you can request to declare and pay the VAT quarterly.
What are the amounts that the independent consultant must declare on his VAT return?
The independent consultant carries out an activity of provision of services, he therefore pays VAT on receipts (except option for the payment of VAT on debits). This means that your collected VAT is due when collecting the down payments and the price.
For each tax period, you will have to mention on your VAT return:
In terms of the VAT collected: the total amount excluding tax of the services that were paid to you over the tax period, including the down payments relating to the services that have not yet been completed;
At the level of deductible VAT: the total amount of VAT on the expenses of the tax period for which you can exercise your right to deduct.
VAT on your expenses is recoverable from the moment it becomes payable at your supplier. This therefore means that:
If your supplier declares his VAT collected according to the debits, you can recover the deductible VAT on your supplier’s invoice according to the debits, that is to say when the invoice is entered in a customer account;
If the supplier declares his VAT collected from the receipts, you can reclaim the deductible VAT on your supplier’s invoice during the outgoing payment, that is, when the invoice is paid.
We discuss this point in detail here: the deduction of VAT on supplier invoices.
How can the independent consultant declare and pay VAT?
To declare and pay your VAT, you can use the service provided for this purpose on the impôt.gouv.fr website, in the section dedicated to professionals.
Once you have created your professional space, you can view a tutorial which explains how to tele-declare and tele-pay your VAT from your professional space.
For independent consultants who entrust their accounting to a chartered accountant, it is often easier to delegate the management of VAT returns and payments to the firm. The subcontracting of this task does not (normally) entail any major additional cost in terms of fees invoiced by the firm.