French Guide: Managing VAT risks

Why is it important to identify VAT risks?

Identifying VAT risks is crucial for tax professionals.

Errors in VAT management can lead to significant adjustments associated with penalties. A recovery can end the sustainability of a business, either because the consequences damage the company's cash flow or worse, because the business has in fact never been profitable. For example, we identify it when operators think that they are authorized not to charge VAT: after the check, the operator identifies when his margin is in fact VAT to be paid to a State.

In addition, in recent years, the amount of relief and the nature of the penalty may have implications in criminal matters: the administration may be required to automatically send the case to the prosecutor so that the latter can determine whether it is worth prosecuting the taxpayer criminally.

At the same time, turnarounds can damage a company's reputation, which can have a long-term impact on business relationships and market viability. In this context, the administration may in some cases point the finger at non-compliant operators (named and shame). Competitors can also sue the company for unfair competition.

Contents of the guide

Our guide covers several key aspects of VAT management to help professionals navigate this complex area:

1. VAT risks associated with domestic transactions : Although perceived as less risky, domestic transactions present specific challenges, such as rate errors, misapplied exemptions, and managing VAT liability.
2. Manage global transactions with confidence : International transactions add an additional layer of complexity. Risks include the misinterpretation of territoriality rules, the securing of proofs of transport for intra-community deliveries, and the management of distance sales.
3. VAT deduction errors : VAT deduction is a complex process that requires special attention. Common mistakes include the incorrect calculation of the deduction coefficient and the inadequate management of the deduction for separate lines of business.
4. Understanding payroll tax : This chapter provides essential information for effective management of this tax, which is often misunderstood.
5. Identify some sectoral risks.

This white paper looks at common VAT risks, providing colleagues and tax professionals with the tools they need to identify the most common dangers. To facilitate this understanding, we have segmented risks by type of activity and by sector.

Hoping it will be of great value to you. We will be happy to discuss this subject and to work in synergy with you for the benefit of your customers and structures.

How to use it well?

To get the most out of our guide, it is essential to follow a methodical approach:

1. Study each section in detail : Take time to understand the concepts and risks presented in each chapter.
2. Apply practical advice : Implement recommended strategies to proactively manage risks.
3. Set up project monitoring: Identify priority projects and make sure to move forward gradually on them to achieve full compliance.
4. Train your teams : Ensure that your teams are well trained and understand VAT issues for consistent and effective management.

This guide also makes it possible to identify in which cases you should probably be accompanied by a firm like Cyplom and in which situations you can actually personally manage the points.

Services offered by Cyplom

As expert VAT lawyers, at Cyplom, we offer a complete range of services to assist you in VAT management:

• Tax audit assistance : Be prepared for tax audits and minimize risks.
• Tax automation : Simplify your tax processes with advanced technological solutions.
• Validation of VAT numbers : Use our VAT Checker Pro tool to periodically check the VAT numbers of your customers and suppliers.
• Electronic invoicing : Adopt electronic invoicing reform stress-free with our help.

Our choice of hyperspecialization allows us to be allies for law firms by working hand in hand with our colleagues while offering other lawyers the opportunity to focus on the core of their expertise.

We have built serious relationships with firms that know that it is in their interest and that of their clients to have VAT issues treated by us.

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