An indirect tax is a tax contribution collected by the public treasury. Unlike direct taxes, indirect taxes are borne by the taxpayer but paid by a third party. The taxpayer and the taxpayer are two different people. In a large majority of cases, indirect taxes are paid to the tax administration.by businesses, but are actually supported by consumers. Indeed, the amount of tax is reflected in the purchase price of the good or service.
In Case of Indirect Tax for You
The most well-known indirect tax is VAT (value added tax). It is the company which sells the good or the service which is liable for the tax, it is it which pays the VAT to the tax authorities. Nevertheless, it is indeed the consumer purchasing the good or service that bears the cost of this tax. The help of the tax preparers is important there.
- VAT represents 60% of state tax revenue. There are other types of indirect taxes such as the tax on petroleum products or customs duties. Governments tend to increase indirect taxes more than direct taxes. In fact, the number of persons liable for indirect taxes is lower, indirect tax is therefore easier to collect, and the impact on the taxpayer is less important since he is not really aware of paying a tax when he buys a good or a service.
In case of the Direct Tax
A direct tax is a fiscal tax collected by the Public Treasury, and paid and borne by the same person, whether it is a natural or legal person. The taxpayer, the person who actually bears the tax, merges with the taxpayer, the person who pays the tax to the tax authorities. Income tax, corporation tax, housing tax, property tax or even wealth tax is thus considered as direct taxes.
How to Submit Indirect Taxes
Indirect taxes, for their part, are borne by the taxpayer, but are paid to the tax authorities by a third party. This is particularly the case with VAT. The consumer bears the VAT, but it is the trader who pays this contribution to the Public Treasury. The direct tax is very often collected by way of roll. The role designates the document drawn up and sent to the taxpayer by the tax administration to request payment of the tax due: this is the tax notice. The payment of direct taxes is generally preceded by a declaration formality. It is up to the taxpayer to declare his income so that the Treasury sends him his tax notice.
The auto-entrepreneur must choose between two tax regimes: the micro-enterprise tax regime and the micro-social regime. The auto-entrepreneur benefits from the VAT exemption.
The tax regime of the auto-entrepreneur
For his taxes, the auto-entrepreneur must choose between two options when declaring his activity. He has the possibility of opting either for the tax regime of the micro-enterprise with application of the progressive scale of the income tax , or for the micro-social regime in which is applied the withholding of the tax on returned. On the other hand, the auto-entrepreneur is exempt from VAT, he can neither invoice nor recover it.
The auto-entrepreneur and the micro-enterprise tax system
On condition that the turnover actually collected during the calendar year does not exceed 176,200 € for the activities of trade and provision of accommodation (hotels, guest rooms, rural lodgings classified as furnished tourist accommodation, furnished tourism) or € 72,500 for services and liberal professions falling under the BNC or BIC, the auto-entrepreneur can choose the simplified micro-social regime
