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Activity type and amount of sales are the two main criteria that determine your tax system. But according to your needs, you may opt for a higher tax regime.

* The franchise base of VAT

Designed to ease the tax obligations of small businesses, this exemption applies to those whose turnover of the previous calendar year was less than:

> 76 300 euro for activities of purchase and resale, sales for consumption on the premises and housing benefits (80 000 for the turnover from 1 January 2009);

> 27 000 euros for other services for commercial or non commercial (32 000 for the turnover from 1 January 2009).

> 37 400 euros for the regulated activities of lawyers and solicitors, transactions in intellectual works and activities of singer-songwriters (41 500 euros for sales made on or after 1 January 2009).

From 1 January 2010 the thresholds of turnover limits will be updated each year in the same proportion as the upper limit of the first tranche of the tax schedule on income.

The franchise tax base for all businesses located within these limits (whatever the legal and taxation of profits) with the exception of farmers under the simplified system of agriculture.

The franchise is maintained during the year the turnover exceeded the threshold (N) provide it did not exceed:

> € 88 000 in respect of supplies of goods sold for consumption on the premises and accommodation services;

> € 34 000 € in respect of other services.

The effects of the franchise: if you are eligible to the franchise base, you do not have to file VAT returns. As a result, on each invoice you deliver to your clients, you must add the following mention: "TVA non applicable - article 293 B du CGI"

To offset the lack of reporting, you can not deduct the VAT you pay on purchases for your business needs.

* Opting for the payment of VAT

You can choose one of the following plans:

- the Simplified Regime

- the Itemised Regime.

To do this you must send a single letter of option with the tax office which has jurisdiction in the place where your business is located.

This option is made compulsory for a minimum of 2 years. It takes effect the 1st day of the month in which it is declared.

Beware, if you are also eligible for the micro BIC or the micro BNC, the option to pay VAT makes you lose the benefit of these schemes.

* The Simplified Regime (RSI)

Whether your profits are taxed under the income tax or the corporation tax, you are affected by this scheme if your turnover is VAT included between:

> 76 300 EUR (80 000 for the turnover from 1 January 2009) and 763 000 for activities of purchase and resale, selling on-trade and supply of housing;

> 27 000 (32 000 for sales made on or after 1 January 2009) and 230 000 for activities to provide services or not trade.

You are also placed under this plan if you normally falls in the franchise tax base and you have opted to pay VAT under RSI.

The VAT RIS is characterized by the payment of 4 installments during the year and filing an annual return CA12/CA12E.

* Down payments of VAT

They must be paid in April, July, October and December, with notices of payments directly to you each quarter. They are automatically calculated on the basis of your tax due the previous year (before deduction of VAT on property constituting capital).

Installments of April, July and October amounted to 1 / 4 of the base, and the December 1 / 5.

When the basis for calculating your installments is less than 1 000, you are exempt from the payment of installments. You pay your VAT for the entire year at the time of filing the declaration CA12/CA12E.

* The Annual Tax Return

You must file the annual return CA12 later than May 5, 2009 if your fiscal year is the calendar year. Otherwise you file the CA12 E within the 3 months following the end of your exercise. The statement CA12 or CA 12 E summarizes the total VAT payable for the year, and sets the basis for calculating payments for the following year.

It also serves to determine the balance of any VAT you have to pay, after deducting the payments made during the year or the year.

* Option for the ITIMISED REGIME (RN).

If you opt for the actual speed standard VAT, please be aware that this option applies to the taxation of profits.

You must tell your tax service business by letter with return receipt before 1 February each year for which you want to benefit from this scheme. It is valid for a minimum of 2 years.

The "mini-real": an alternative regime

You want to opt for the RN, but you want to make simplified declarations to your profits? You can opt for the regime of "mini-real", which allows you to file VAT returns monthly CA3 while staying at RSI for reporting profits.

This option, applied for a minimum of 2 years should be addressed to your business tax service by letter with acknowledgment. You must submit no later than May 5, 2009. It takes effect on 1 January 2009.

* The Itemised Regime (RN)

It covers companies that have opted for this plan or that the net sales is higher than:

> 230 000 for business service delivery

> 763 000 euro for activities of purchase and resale, selling on-trade and supply of housing

When you're under this plan, you must file a monthly statement CA3 which allows you to calculate the VAT due for the previous month.

CA3 Quarterly

The amount of your tax due each year does not exceed 4 000 in the year? For your convenience, you can choose to file your returns CA3 not monthly, but each calendar quarter. Simply apply for your tax service business during the first quarter of the year, once you know the amount of VAT payable in the previous year. You then file a quarterly statement from the 1st quarter of the year.