Unless there is a specific exemption or benefit from a VAT-based franchise, liberal professionals are in principle liable for VAT. The general rate of VAT applicable to liberal professionals is 20% (8.5% in the overseas departments).
The VAT Due
The VAT due is calculated by the difference between the tax invoiced and collected from customers and the tax charged on the acquisition of goods or services. VAT on certain goods and services are not deductible.
Those subject to VAT have specific obligations concerning the invoicing and accounting of transactions (separate accounting depending on the situation of transactions in relation to VAT).
At the start of their activity, unless there is an option in favor of VAT, professionals automatically fall under the VAT-based franchise regime which allows them to not be subject to tax.
Exempt liberal benefits
Services provided by the health professions: care provided to persons by members of regulated medical and paramedical professions, by practitioners authorized to legally use the title of osteopath or chiropractor and by psychologists, psychoanalysts and psychotherapists is exempt. One of the diplomas required, on the date of its issue, to be recruited as a psychologist in the hospital public service, as well as medical biology analysis work and dental prosthesis supplies by dentists and prosthetics. The self employment tax calculator comes most useful in this case.
Please note: revenues, non-therapeutic aesthetic services, collaboration fees, earnings from regular replacements do not benefit from the exemption. These receipts are in principle subject to VAT, except if they do not exceed the threshold for the basic franchise (all non-exempt transactions added).
Continuing vocational training services: training services provided by liberal professionals holding a certificate issued by the competent administrative authority recognizing that they meet the conditions set for exercising their activity within the framework of continuing vocational training are exempt. .
Educational services: courses or lessons relating to school, university, vocational, artistic or sports education, provided by natural persons who are paid directly by their students, are exempt.
Services of general insurance agents: general insurance agents are exempt for insurance or reinsurance intermediation operations carried out within the framework of their mandate, as well as for their insurance or reinsurance brokerage activity.
Other exemptions: services provided by legal representatives for the protection of adults (formerly supervisory managers and certain intermediation services in banking and financial matters.
- Effects of the VAT exemption
- No VAT collected, deductible and paid.
- No VAT return filing.
- No option for VAT payment possible.
- VAT-based franchise regime
- Professionals concerned
The VAT-based franchise regime concerns, as of January 1, 2020:
Liberal professionals whose 2018 annual revenues are less than or equal to € 33,200 excluding tax (architects, sales agents, accountants, various consultants, etc.), or are between € 33,200 excluding tax and € 35,200 excluding tax if they are This is the first exceeding of the threshold of € 33,200 in 2018.
If then the revenues for the year 2019 exceed the threshold of € 35,200, the liberal professional will have to submit to VAT the services provided from the 1st day of the month of exceeding.