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French Artisans
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 13/12/2007, 19:09
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MicAni
Joined on 11/12/2007
Posts 10
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That's interesting Coco, we had new dormer windows fitted in our granary last month which were not a replacement and our builder charged us 5.5%. Maybe the difference was that yours was an extension and our wasn't...I'm not sure..
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16/05/2008, 10:38
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lmc
Joined on 16/05/2008
Posts 26
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Hi,
I just found this thread so sorry it's so many months later. I work for a French chartered accountant and I've just translated the latest regs on this into English so I'm pretty sure about it all.
Nick is pretty much right in what he has said. However, work to a facade (new crepi or exposing the stones for example) will always be charged at 19.6% rather than 5.5% even if the building is 500 years old because it counts as cosmetic work which doesn't qualify for the reduced rate.
The reason why artisans will sometimes ask how long you have been there or what other work has recently been done is because qualifying for the reduced rate of VAT is dependent on the size of the project (are you effectively creating a "new" house even if you are splitting the work up over a long period?) and the size of the project is measured over the previous two years but also over the following two years (can you believe it?). Therefore, if there is clearly still an awful lot of work to do to finish the place then they are liable to decide that in fact 19.6% should be charged even if it is a job that would ordinarily qualify as 5.5%.
An example is replacing an old bathroom - 5.5%, right? But if you are turning the place into a 6 bed property then you will certainly be fitting more than one bathroom eventually - more like 3 or 4. In this case you are effectively creating a new system of sanitation so later bathrooms should be 19.6% even if the first one isn't.
Hope that's a bit clearer.
Lisa
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16/05/2008, 19:49
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TroisChatNoir
 
Joined on 31/08/2006
Indre
Posts 30
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this whole area seems to be a can of worms!
I have just been challenged on TVA by a client who seems to know a lot about this as he is a european corporate accountant, his statement to me and one to which my french accountant has agreed to investigate is as follows; it doesn't matter how old the property is or whether its renovation work as long as it's labour intensive and involves supply of materials and crucially its not a new build, I dont' suppose the Hotel D'Impots will complain as we seem to be handing them too much money every trimester.
You buy 1,000 euro of materials from the builders Merchants
They add vat @ 19.6%
You get an invoice
1000.00 materials
196.00 TVA @ 19.6%
1196.00 Total to pay
You claim back 196.00 euro on your VAT return
---------------------------------------------------------------------
You carry out work for the client
You invoice them as follows
3,000.00 Labour
1,000.00 Materials
4,000.00 Net
220.00 TVA @ 5.5%
4,220.00 TOTAL
You add the 220 Euro to your VAT return
You pay the TVA a net total of 24 euro's (220-196)
it seems to be working for me at the moment and this is how it was explained to us on the new business course (etage) run by the chamber de metiers in Gueret. when you also add into the equation TVA from running costs such as fuel/vehicles/telephones/etc you may find that the hotel d impots owes you money not the other way round ......
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17/05/2008, 8:43
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Iceni
Joined on 23/08/2004
Lot 46
Posts 2,906
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And of course the clients of 3bc have to complete the form certifying that the house has been a house for over 2 years etc etc thus appearing to absolve 3bc from any blame if the incorrect rate of TVA has been applied. Though I don't know anyone who has been the subject of a TVA investigation to know whether these forms are a good shield.
When we ran our biz back in Essex we always charged VAT according to the rules - not prepared to risk the wrath of the Customs Gestapo to save a customer a few quid. But that's another country and another story.
John
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17/05/2008, 10:18
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Val_2
Joined on 23/08/2004
Posts 3,054
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John, several builders here in Brittany were subjected to an inspection by the TVA inspectors and all had to stump up thousands of euros that were deemed to be owing because the work they did in real terms represented a complete new property at the end of the day. Luckily,it was only a minority and most artisans are on the level or if not sure like us,we get it in writing from the TVA people as to the correct rate to charge. At least now the onus is on the client to pay the difference and not the artisan any more.
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17/05/2008, 13:49
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TroisChatNoir
Joined on 31/08/2006
Indre
Posts 30
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![Big Smile [:D]](/cs/images/emotions/biggrin.gif)
Re: 5.5% or 19.6% ?
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As a Restorative Stonemason the "built in the last two years" rule
doesn't apply to me, the buildings I work on are mainly all pre war but it appears that TVA is still a moot point, along with every Devis is a copy of an attestation that the client signs to say the building is an Old building and the work is to repair & restore existing structures, anything new or an alteration to the original structure is subcontracted out to other artisans, all the other work is open to debate, an example is a job I've just completed which was to rebuild a collapsed portion of a building including the missing window, door & part of the roof and then repoint the whole, I used the existing stone which was lying around the place, repaired the door & window Jambs/Lintels with some reclaimed Oak from the barns, had a new Oak door made & put in new double glazed windows along with new petite tiles on the new roof timbers, the house is a bit like the tale of the fishermans knife which has had ten blades & 1 handle but it's basically still the same knife cos some of it is original and we are restoring it back to its original glory. the same supplier/client rule applies as per my original post therefore materials I supply can carry a surcharge but only 5.5% is charged to the client TTC on any invoice. If I subcontract myself to another Artisan I charge them 19.6% they claim it back on their TVA return but charge the client 5.5% TTC for my services otherwise TVA is being charged twice, as far as I am aware that is not strictly legal ....
my rates are the same as local French artisans and the amount of profit or choice of materials made is usually the difference between winning and losing a contract if it comes down to price! in my experience winning usually comes down to reputation from previous clients ...
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17/05/2008, 14:11
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BJSLIV
Joined on 23/08/2004
Posts 2,384
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If you are getting involved in rebuilding walls then client must sign the full version of the certificate. Whether the work qualifies for 5.5 will then depend on the exact nature and the percentage of the existing structure which is affected.
http://www.pro-habitat.com/pdf/attestationnormale.pdf
As for your subcontract work the normal rules of VAT apply. You charge the full rate to the main contractor who will reclaim all of the tax you have charged.
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17/05/2008, 14:29
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TroisChatNoir
Joined on 31/08/2006
Indre
Posts 30
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you are correct on all counts BJSLIV this form was supplied to me by my accountant 2 yrs ago.
my advice to anyone is to use qualified tradesmen with a good accountant then there should be no worries
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France Forum » Owning/Running ... » French Artisans » 5.5% or 19.6% ?
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