Introduction

This lexicon is designed to provide a comprehensive and accessible reference to the main terms related to VAT. From intra-community acquisition to distance sales, each entry aims to clarify the key concepts and specific mechanisms that govern VAT. Whether you are an accounting professional, a business owner, or a tax student, this guide will help you master the intricacies of VAT and stay compliant with current regulations.

As you go through this lexicon, you will discover not only precise definitions but also explanations of how these terms apply in real world scenarios. Concepts such as reverse charge, VAT deduction, and special margin regimes are explained in order to make VAT more understandable and manageable. This lexicon is a valuable tool for anyone looking to deepen their knowledge of VAT and to navigate the complex tax landscape in an informed and effective manner.

Let's dive into the details of VAT with this comprehensive lexicon that will support you in your tax procedures and help you maximize your tax benefits while remaining in compliance with the law.

A

• Intra-community acquisition : Arrival of goods from one Member State into the territory of another Member State in the context of a transaction between taxable persons.
• Subject : Anyone who independently carries out an economic activity (industrial, commercial, commercial, liberal, agricultural, or civil), regardless of their legal status, their situation with regard to other taxes and the form or nature of their intervention.
• Single taxable person : See VAT group.
• Auto-liquidation : A mechanism for reversal of the debtor where the supplier does not collect VAT, it is paid by the customer.
• Franchise purchase : Mechanism for the acquisition of goods and services without VAT when the company wishes to ship the goods outside France.

B

• Tax base : Amount on which the VAT due is calculated, varying according to the nature of the transaction and the specific rules applicable.
• Used goods : Goods that were used prior to their current sale. Some specific VAT regimes apply to the sale of used goods, including the seller's profit margin that may be taxed instead of the total selling price.
• Real estate : Category of goods affected by specific VAT rules, in particular for the rental or sale of buildings, which may differ significantly from the rules applicable to movable goods.

C

• Scope of VAT : A transaction is within the scope of VAT if it is carried out for consideration, by a taxable person, and provides an advantage to an identified beneficiary.
• Admission coefficient : Depends on the regulations in force; it is 1 when the good or service is deductible and 0 when a provision prohibits the deduction of the related VAT.
• Submission coefficient : Proportion of use of the good or service to carry out transactions falling within the scope of VAT.
• Tax coefficient : Proportion of use of the good or service for carrying out transactions eligible for deduction.
• Tax control : Process by which tax authorities verify the accuracy of taxable persons' VAT declarations and payments. May result in adjustments or sanctions in case of non-compliance.
• Consignment : Specific VAT rules applicable when goods are kept on consignment at a customer or distributor, before their final sale.
• VAT credit : Situation in which a taxable person paid more VAT on his purchases than he collected on his sales, allowing him to request a refund of the excess or to report it on future declarations.

D

• VAT declaration : An official document by which a taxable person reports to the tax authorities the amount of VAT collected and deductible for a given period of time.
• VAT deduction : Mechanism for deducting the VAT borne on purchases, calculated according to the combination of 3 coefficients (taxation, taxation and admission).
• Import declaration : Specific declaration process for imported goods, requiring the payment of import VAT in many tax systems.
• Limitation period : Legal period during which the tax authority is authorized to investigate and claim the payment of unpaid VAT or to refund a VAT credit to a taxable person.
• Exemption from VAT : Some taxable persons or transactions may be exempt from VAT under specific conditions, reducing administrative obligations.
• Customs duties : Withdrawals incurred when goods are brought into the territory of the EU or into France from territories outside the EU, applicable if the imported goods are greater than 150 euros.

E

• Collaborative economy : Exchanges of goods or services between individuals via online platforms, potentially subject to VAT.
• Member State of consumption : The Member State where the goods are consumed and where VAT is due.
• Exigibility : Date from which the Treasury can claim the payment of VAT.
• Exporting : Departure of an asset from a Member State to a country outside the EU.
• Exemption with right to deduct : Situation where a taxable person is exempt from collecting VAT on certain transactions but retains the right to deduct the VAT paid on his own purchases and investments.

F

• Simplified billing : Document used to justify a commercial transaction, with less stringent requirements than for a complete invoice, used under certain specific conditions for VAT.
• Made generator : Event giving rise to the tax claim for the benefit of the treasury.
• Domestic flow : Operation within a country.
• VAT exemption : A regime that allows certain small businesses not to charge VAT to their customers and, therefore, not to deduct VAT on their purchases.

G

• TVA Group : Set of entities grouped together to form a single entity for the purposes of VAT. The flows between them are not subject to VAT.
• IOSS one-stop shop : A window for declaring and paying VAT from other EU member states in connection with distance sales of imported goods under 150 euros.
• OSS one-stop shop : A window for declaring and paying VAT from other EU member states in connection with intra-community distance sales and taxable services abroad.

I

• VAT identification : Obligation for taxable persons to identify themselves for tax purposes with the authorities of the Member State concerned.
• Importing : Arrival of an asset from a country outside the EU on the territory of an EU member state.
• Temporary imports : A regime that allows goods to be imported into a country without immediate payment of VAT, provided that these goods are intended to be re-exported within a certain period of time.

J

• Justification for VAT exemption : Documentation and evidence required to benefit from VAT exemption on certain transactions, such as exports.

L

• Place of provision of services : Determine where services are considered to be provided for VAT purposes. This affects the country in which VAT must be declared and paid.
• Self-delivery : Transaction involving the self-declaration of an internal transaction subject to VAT.
• Delivery of goods : Transfer of the power to dispose of tangible property as an owner.
• Intra-community delivery : Departure of goods from one Member State to another Member State between taxable persons.
• Finance rental (leasing) : Transactions that may be subject to special VAT rules, depending on whether they are considered to be supplies of goods or services.

M

• Mini Single Window (MOSS) : Simplified mechanism for declaring and paying VAT due in different Member States for certain services.

N

• Neutrality of VAT : Principle that VAT is neutral for taxable businesses, insofar as they do not bear the final cost of the tax, which is supposed to ensure fair competition.
• VAT identification number : Unique number assigned to each taxable person by the tax authorities of their country.

O

• Exempt transaction : Economic transaction within the scope of VAT but without VAT application.
• Triangular operation : Transaction involving three VAT taxable persons established in different Member States.
• Operations outside the scope of VAT : Transactions that do not fall within the scope of VAT, either because they do not constitute a supply of goods or services, or because they are not carried out by a taxable person acting as such.
• Complex operations : Services that may combine elements of goods and services, or several types of services, for which the applicable VAT rules may be particularly complex to determine.

P

• Non-taxable legal person : Entity carrying out economic activities but not considered to be subject to VAT for certain transactions.
• Principle of destination : VAT is applied and collected in the country where the good or service is consumed.
• Provision of services : An operation that does not constitute a delivery of goods.
• Prorata of deduction : Method for calculating the deductible portion of VAT applicable to taxable persons carrying out both taxable and VAT-free transactions (deduction coefficient).

R

• VAT regularization : Additional deduction or repayment in the event of a change in the taxable person's deduction rights.
• Reverse charge : See Reverse Charge.
• VAT refund : A mechanism allowing a taxable person to recover the VAT he paid on purchases or imports, insofar as these expenses are related to his taxable activity.
• Special margin regime : VAT regime applicable to second-hand goods, works of art, collectibles and antiques, where VAT is calculated not on the total selling price, but on the seller's profit margin.

S

• Electronic services : Services provided electronically, often involving the transfer of digital data, and subject to specific VAT rules, in particular with regard to the place of supply and the declaration.
• Distance sales threshold : Thresholds for distance sales determining where VAT must be paid.
• VAT system : Set of rules administering value added tax.

T

• VAT rate : Percentage applied to the tax base to calculate the VAT due.
• Customs territory of the Union : Area where EU customs legislation applies.
• Third parties : Country or territory that does not belong to the EU.
• Intra-community stock transfer : Transfer of goods from one Member State to another Member State.
• Contract work : An operation to transform goods without creating new goods.
• VAT : Value added tax, consumption tax allowing the deduction of VAT paid on purchases.

V

• Added value : Difference between the selling price and the cost of raw materials or inputs.
• Distance sales of imported goods : Sales of goods by a professional to an individual, with shipment of goods from a country outside the EU to an EU member state.
• Intra-community distance sales : Sales of goods by a professional to an individual, with goods shipped from one EU state to another.

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