Tax on materials
I am an artisan micro-entrepreneur. I bill customers for labour and materials. I pay tax via the libératoire method quarterly. Do I have to declare the amount I am paid for the materials?
Yes, you must declare the amount invoiced. This includes amounts charged for materials you have bought, so you are paying income tax and social charges not only on your income, but also on what you charge to cover your material costs.
It is often the case that if expenses amount to more than a quarter of your income, the micro-entrepreneur is costlier than a traditional business regime. The scheme is fine for those with few expenses but when expenses, eg. materials, are invoiced, it may lose its advantages with regard to tax and cash flow.
This question was answered by Olaf Muscat Baron who is a Fellow of the Chartered Association of Accountants UK, a French expert comptable and an International tax advisor.
He is the principal accountant of Fiscaly, an accountancy firm based in the Dordogne.
See www.fiscaly.fr or call 09 81 09 00 15