COVID-19: How is VAT impacted?
- Unlike direct taxes for companies (corporate income tax, payroll tax, CFE, property tax, CVAE, etc.), VAT is not included in the exceptional measures of deferred payment granted by the government. Some adjustments may however be considered.
VAT is a tax borne by consumers. Businesses are only the collectors and as such must continue to transfer it to the State.
In fact, the Government has recalled: the State needs revenue; the collection of VAT is therefore essential (and even more so at this critical time) to ensure the proper functioning of public services and to enable the financing of emergency measures.
- No deferral of VAT payments but an acceleration of VAT credit refunds!
The Tax authorities have received instructions to deal with requests for refunds of available VAT credits as soon as possible.
- Furthermore, in practice, adapted solutions for the most difficult situation may be considered.
- For VAT mentioned on the invoices issued but not yet collected (this is notably the case for invoices relating to the delivery of goods, for which the supplier must in principle collect the VAT immediately, even though their client has not yet paid it), the Tax administration has announced that if VAT remains in principle payable any discrepancies of this type would be subject to favorable treatment on a case-by-case basis.
- Certain local Tax offices have accepted verbally, without waiting for an application to be lodged with the Commission des Chefs de Services financiers (CCSF), to defer the VAT payment date.
- Finally, for businesses subject to simplified VAT regimes, special arrangements for deferral of payments may be sought.
We are available to assist you and to determine, without delay, the most pertinent steps to be taken with respect to your company’s position.