Payable value-added tax (VAT), output VAT, deductible VAT: what’s the difference, and how do you calculate each? Here, we examine the specifics of payable VAT in France, which is the total amount owed to the French government over a given period. If you own a VAT-liable company, it’s very important to master VAT calculation, accounting, and declaration processes.
What’s in this article?
- What is VAT?
- What is payable VAT?
- What’s the difference between output VAT and payable VAT?
- How do you calculate payable VAT?
- How do you account for payable VAT?
- How do you declare payable VAT?
What is VAT?
VAT is an indirect tax on consumption that a customer pays when making a purchase from a company. VAT-registered companies must collect this tax on behalf of the state. They invoice a price inclusive of all taxes (toutes taxes comprises, or TTC) at the time of sale and pay the VAT to the government according to their tax regime.
What is payable VAT?
Payable VAT is the total amount a VAT-liable company must pay to the French government at the end of each accounting period. It’s also known as “VAT due” or “VAT to be paid.”
What’s the difference between output VAT and payable VAT?
Output VAT represents the tax that the company invoices to the customer on behalf of the government. Conversely, payable VAT is the total amount a company must pay to the French government after subtracting the VAT incurred on purchases related to the company’s operations (also known as “deductible VAT”).
How do you calculate payable VAT?
At the end of each accounting period, VAT-registered companies must calculate the amount of VAT owed to the government (learn how to calculate VAT on sales in our article on the subject). The length of the accounting period varies based on the chosen tax regime. It can be one month or one quarter for companies under the normal regime or one year for those under the simplified regime.
To calculate the payable VAT, subtract the deductible VAT from the output VAT for the reference period:

When output VAT exceeds deductible VAT, the company pays the government the difference, known as “payable VAT.”
On the other hand, when deductible VAT exceeds output VAT, the company might receive a VAT credit from the government, either as a refund or an offset. Businesses should only consider VAT incurred on deductible operations (i.e., those that are eligible and necessary for the business activity) in the calculation.
The diagram below illustrates how to determine if you have VAT to pay.

Example: Calculating payable VAT
Here’s an example to better illustrate payable VAT.
In October, you sell your service, priced at €350 excluding VAT, a total of 13 times. With a VAT rate of 20% applied to the service, the output VAT collected on sales amounts to €910.
€350 x 0.20 x 13 = €910 Output VAT
You also purchase a touch screen tablet for €160 excluding VAT and billed at the standard VAT rate of 20%:
€160 x 0.20 = €32 Deductible VAT
To calculate the payable VAT, subtract the deductible VAT from the output VAT:
€910 - €32 = €878 Payable VAT
Since the output VAT during the month exceeds the deductible VAT, you have €878 to pay for October, meaning you won’t receive a VAT credit.
You can streamline your administrative tasks with Stripe Tax, an advanced tool that automates tax calculations and accelerates the preparation and submission of your VAT returns. Stripe also offers detailed reports on your transactions and income for the year.
How do you record payable VAT in accounting?
The account for payable VAT is 44551. Businesses can credit account 44551 for the amount of VAT owed to the government.
How do you declare payable VAT?
The frequency of declaration and the corresponding form vary depending on the company’s tax regime. Businesses under the simplified VAT regime must file an annual VAT return using the online Cerfa form no. 3517-S-SD. Businesses under the normal VAT regime must file a monthly or quarterly VAT return using the Cerfa form no. 3310-CA3-SD or Cerfa CA3.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular situation.