Are you subject to the simplified tax regime? Do you want to take time off under the normal tax regime? If so, the advance payment of value-added tax (VAT) will apply to you. This article will explore the key aspects of VAT payments on account, including their definition, types, calculation, and payment, among other details.

What’s in this article?

• What is a VAT payment on account?
  
• How are VAT payments on account calculated?
  
• How do I pay VAT on account?
  
• When do I have to pay VAT on account?
  
• Can I change the amount of a VAT payment on account?
  

What is a VAT payment on account?

A VAT payment on account is an advance partial payment of the VAT owed to the tax authorities. There are two types of VAT instalments, each corresponding to a different tax regime.

• A half-yearly VAT instalment under the simplified regime
  
• A VAT instalment paid for holiday periods under the normal regime
  

VAT payments on account under the simplified regime

The simplified tax regime (“régime simplifié d’imposition” [RSI]) requires an annual VAT return along with two half-yearly instalments. Businesses under the simplified regime must pay a first VAT instalment in July and a second instalment in December when their financial year ends 31 December.

VAT payments on account under the normal regime

Typically, businesses operating under the normal regime (“régime réel normal” [RN]) must declare and pay VAT to the French state monthly. However, during holiday periods, they can make an advance VAT payment instead of paying the actual amount for that period. This administrative flexibility reduces the tax burden for businesses under the normal tax regime when they close for holidays.

Find out more about the VAT regimes in France and the VAT declaration in our related articles.

How are VAT payments on account calculated?

The method for calculating the VAT payment on account depends on the tax regime a business falls under.

Calculating half-yearly VAT installments

Calculate half-yearly VAT instalments based on the amount of VAT owed in the previous year. Under the simplified regime, the July instalment amounts to 55% of the VAT owed from the previous year, while the December instalment represents 40% of that amount. The balance you pay on the annual VAT return is the remaining VAT amount after deducting the instalments already paid. Read our other articles to find out how to calculate VAT according to the VAT rates in France.

For new businesses under the simplified tax regime that have not paid VAT, advance payments must cover at least 80% of the VAT owed for the corresponding half-year.

You can simplify your tax compliance with Stripe Tax, an automated tool that streamlines the calculation, preparation, and submission of your VAT returns. Stripe also provides detailed reports on your transactions and income for the year.

Calculating the VAT vacation instalment

Under the normal regime, the vacation instalment must be at least 80% of the VAT paid in the previous month or the amount due for the current month. The VAT return for the following month must factor in the VAT owed for the two months in question.

Learn more about VAT instalments during vacation periods and the adjustments in the following month by reading the French government’s article on the topic.

How do I pay VAT on account?

You can make the half-yearly advance payment through the business portal on the Direction générale des Finances publiques (DGFiP) website. You must submit the advance payment notice electronically – form n°3514-SD – along with your payment.

When do I have to pay VAT on account?

The payment dates for VAT installments under the simplified regime depend on the location of the business, the type and SIREN number of the business, or the name of the entrepreneur. Find the deadlines for VAT installments at this link.

Note that businesses under the simplified regime are exempt from paying VAT on account if the amount of VAT paid in the previous year is less than €1,000.

Under the normal regime, a business can make a VAT payment on account if it expects a vacation period. For example, if a business plans to close for August, it can electronically file its VAT return for July during that month, along with the payment of the predetermined VAT instalment.

Can I change the amount of a VAT payment on account?

A business under the simplified VAT regime can request an adjustment to the amount of a VAT instalment if it believes the VAT due is over or under by more than 10% the planned instalment amount.