Most companies that own or use vehicles of a certain category, which we are going to define, must declare and pay an annual tax each year during the month of January.
This tax is relative to the previous calendar year and its amount depends on the number and type of vehicles used as well as the duration of use for cars that it does not own.
I- Which are the possible companies affected by this tax?
In principle, all companies, whatever their form or tax regime, are liable to this tax.
The following companies are taxable :
- Sociétés anonymes (S.A.), S.E.L.A.F.A.
- S.A.R.L., E.U.R.L., S.E.L.A.R.L.
- Sociétés en commandite simple, Sociétés en commandite par actions
- Sociétés en nom collectif (S.N.C.)
- Sociétés en participation
- Sociétés coopératives
- Sociétés civiles (S.C.I., S.C.M., S.C.P., S.C.E.A.)
- Groupements fonciers agricoles
- Companies in liquidation
- Some public institutions and state agencies of a commercial or industrial nature
- E.U.R.L. assimilated in tax terms to a S.A.R.L.
Certain legal persons who do not aim for the profit motive remain however exempted from this tax. These are mainly :
- Associations governed by the law of July 1st 1901
- Works Councils, Social and Economic Committee
- Trade unions
- Agricultural groups operating in common (G.A.E.C.)
- Economic Interest Groupings (G.I.E.)
II – Which are the taxable vehicles?
1. Taxable vehicles because of their classification
These are mainly passenger vehicles, all passenger cars within the meaning of the 2007 European Directive (dir. CE 2007/46 September 5th 2007). It is therefore vehicles classified in category M1 by this Directive. For cars registered in France, those are classified in the category “V.P.” on the registration certificate.
However, it is necessary to note the following details :
- All passenger cars are taxable regardless of their use ;
- Cars converted into commercial vehicles classified as “DERIVES V.P.” on the registration certificate with only one row of front seats (no seats on rear) and intended for carriage are exempt ;
- Vehicles of category N1 whose registration certificate bears the mention “CAMIONNETTE” or “CTTE” but which have seating positions at the rear are liable to T.V.S ;
- On the other hand, long-cab commercial vehicles with several rows of seats are not liable to tax provided that they are assigned by the company for the carriage of goods ;
- Since January 1st 2019 vehicles classified as “pick-up trucks” with at least 5 seats are taxable.
2. Vehicles must be owned or used by a corporation
The vehicles mentioned above are subject to tax even if they are registered in another country or owned by another person. They just need to be used by the society.
On the other hand, passenger vehicles registered abroad, belonging to a French company but used by it abroad, are not liable to the sentence of T.V.S.
As a result, a company is liable for the tax on vehicles used in France made available by another company.
- Vehicles made available by another company: in this case the tax is the responsibility of the company receiving the loan. If, however, the beneficiary is not a taxable person of T.V.S., it is the owner who becomes the indebted if it is a company.
- Vehicles rented by a company: the tax is due regardless of the form of the rental (with or without driver, leasing, etc.). The tax is due only if the rental period exceeds one calendar month or a period of 30 consecutive days.
- Vehicles owned or rented by employees or managers. These vehicles are taxable when several conditions are met:
- These are private cars;
- They are used to make business trips and are reimbursed for mileage;
- The displacements represent more than 15 000 kilometers;
- T.V.S. relating to these vehicles exceeds € 15 000.
3. Exempt vehicles
These are the following cars :
- Vehicles belonging to automobile dealers and intended for resale ;
- Demonstration cars provided to vendors even if they use them for personal transport during the week or even on weekends ;
- Demonstration or loan cars made available to customers for a short period ;
- Cars belonging to car rental companies on the condition that they are intended for rental ;
- Cars for driving instruction and competition vehicles ;
- Vehicles intended for agricultural use ;
- Pick-ups used in the ski lifts of ski resorts ;
- Hybrid vehicles : they are exempted from part of the tax for 12 months if their CO² emission is at most 100 grams per kilometer ;
- Vehicles exclusively electric (partially or totally) if they emit less than 20 grams of CO² per kilometer ;
- Wheelchair Accessible Vehicles.
III – Tax calculation
Its total amount is equal to the sum of two components.
1. First component: CO2 emission
This component is different according to the vehicle used, and is fixed of the following way :
- Based on CO² emissions for vehicles owned for the first time by the company as of January 1st, 2006 and put into circulation as of June 1st, 2004. There is a scale according to the number of grams of CO2 emitted per kilometer, we give you below some examples of tariffs (the minimum rate and the maximum):
NUMBER OF GRAMS OF CO²
ANNUAL TARIFF PER GRAM
Less than or equal to 20
Greater than 20 and inferior or equal to 60
Greater to 250
- Based on the fiscal power for other vehicles. For example, for cars with 7 to 10 HP the annual tariff is € 3000.
2. Second component: air tariff
This tariff takes into account the emission of other air pollutants, it differentiates diesel vehicles and gasoline vehicles as well as the year of first entry into circulation.
For example, for a car put into first traffic from 2015 or later, the annual amount is € 20 for a gas car and € 40 for a diesel car.
3. Complementary calculations
- Vehicles rented : The calculation is based on the number of cars rented during each quarter provided that the rental period is greater than one month or 30 consecutive days ;
- Vehicles owned or rented by employees or officers : we only declare the quarters during which the employee or the manager made business trips.
A reduction is then made in proportion to a weighting factor according to the number of kilometers reimbursed. Finally, we apply an overall reduction of 15,000 euros.
IV – Declaration and payment
Companies under a real TVA tax regime and companies not liable for VAT issue their declaration during the month of January on an annex to the declaration N ° 3310 A (VAT return CA3).
Companies under a simplified VAT system must complete a specific declaration no. 2855-SD and deposit it with the payment no later than January 15th.
There is a help sheet for calculation No. 2855-FC-SD, its use is optional but we advise you to use it.
In conclusion, many companies encounter difficulties in knowing whether a vehicle is taxable or non-taxable depending on its category or because of its use. We can of course help you if you encounter such doubt.
It should also be known that this tax is not deductible from the taxable income when it is paid by a corporation subject to corporation tax, but it is deductible for corporations subject to income tax.
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