10/25/2022: VAT – Public consultation – Single taxable person scheme – Transposition into national law of the mechanism provided for in Article 11 of Council Directive 2006/112/EC of 28 November 2006 relating to the system common value added tax (Companies – Urgent publication)
Article 162 of Finance Law No. 2020-1721 of December 29, 2020 for 2021 transposes into French law the provisions of Article 11 of Council Directive 2006/112/EC of November 28, 2006 relating to the common system of value added tax (VAT) , under which each Member State may consider as a single taxable person persons established in the territory of that same Member State who are independent from a legal point of view but who are closely linked to each other in financial, economic and organizational.
This single taxable person regime, now provided for in Article 256 C of the General Tax Code (CGI) , is an instrument for modernizing VAT. In particular, it contributes to greater economic neutrality and ultimately simplifies corporate tax management.
The constitution of a single taxable person, optional, is possible in all sectors of economic activity. Its members must be taxable persons established in France, having financial, economic and organizational links between them.
A single taxable person is formed on the option of entities fulfilling these conditions for a minimum period of three years. Its members freely designate one of them as the representative of the single taxable person, in order to fulfill all the obligations related to the tax and make the payment for which they remain jointly and severally liable.
Between members of such a single taxable person, transactions disappear for the purposes of the tax. In addition, the deliveries of goods or the provision of services carried out by the members of the single taxable person are deemed, for VAT purposes, to be carried out by the single taxable person. Transactions carried out for the benefit of a member are deemed to be intended for the single taxable person.
The deduction rights of the single taxable person are determined according to a system similar to the rules of common law. Each member is, however, considered as a sector of activity of the single taxable person. The principle of allocation then applies as a priority. For expenses that cannot be assigned, a pro rata calculation at the relevant level applies.
In addition, reporting obligations and control methods must also be adapted to the system of the single taxable person.
Finally, this new system has no impact on other taxes, duties and levies of any kind for which the members of the single taxable person are liable, including on assessed and collected taxes as in the case of VAT. The establishment of such a taxable person is nevertheless likely to affect the relationship of liability to tax on the salaries of its members.
Source: gouv.fr
