U-turn on VAT fraud software and small businesses
Micro-entrepreneurs (the name for auto-entrepreneurs ) have won a victory over the tax office as the government has back-tracked on plans to force them to use business software to stop VAT frauds – because they do not charge VAT.
The loi anti-fraude à la TVA law would have made the installation of transaction billing software compulsory for all businesses, sole traders and public institutions who are liable to VAT and who deal with settling clients’ bills.
It was due to come into force on January 1, 2018, and micro-entrepreneurs assumed that as they have no dealings with VAT except to pay it when it is in a bill then they would not be covered by the law.
When they discovered they were included in the sweeping law they were dismayed at the cost (from €30 to €70 for the software) and injustice of the threatened €7,500 possible fine.
Now, new Public Accounts Minister Gérald Darmanin has said the law must be simplified.
The Bercy tax ministry said in a press statement: “Faced with the concern expressed by companies, in particular the smallest of them, the minister has decided to refocus and simplify it.”
New measures would be in place by the end of the year.
The Fédération des Auto-entrepreneurs and Confédération des Petites et Moyennes Entreprises protested vigorously to President Macron’s new government and won the U-turn after a few days.
Now the software will only be necessary for small businesses that offer over-the-counter sales and many will already have similar software in place. This will need updating.
The fraud happens when software is used to create new till receipts that mask any cash payments being received.
FEDAE estimates that 76,000 micro-entrepreneurs will use the new system. They will be in non-food retail, market sales or trade sales and will have six months to get set up although there have been complaints about certification being slow.
