Everything you need to know about CVAE/VAC
What is it?
The value-added contribution (VAC) is a form of property tax. The contribution includes the territorial economic contribution. The CVAE is owed by companies and self-employed persons from a certain turnover. It is calculated based on the value added generated by the company.
Who is involved?
The CVAE: Company Value Added Assessment is due by the company (natural or legal person) who meets the following 2 conditions:
- Any company or person carrying out a non-salaried professional activity and generating a turnover excluding tax of more than 500 000 € is liable for the CVAE. And this is applicable regardless of the legal status, the activity or the tax system.
- However, all companies or persons engaged in a self-employed professional activity and whose turnover exceeds 152 500 € are required to file a declaration of added value and number of employees, even if they are not ultimately liable for the CVAE.
What else is taking into account?
Revenue and value added are taken into account in determining the tax base of the CVAE. The turnover is used to determine the eligibility threshold for the effective company tax rate. The calculation of turnover is made over the reference period which generally corresponds to the year ended during the taxation year. The turnover to be taken into account for the CVAE base is wider than the company’s accounting turnover.
Value added is determined from turnover, plus other income, and reduced by production costs and other expenses, relating to taxable activities
- The contribution rate is currently equal to 75%value added generated. However, companies whose turnover does not exceed €50 000 000 have relief
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