The company must make a declaration of results to the tax service within 60 days of the change of activity, even if it benefits from tax relief.
In this situation, the company loses its right to carry forward losses. Also, the general tax code provides that the option for carryback cannot be exercised during a financial year during which a business termination occurs.
Tax consequences of the change of corporate object leading to a change in actual activity
The change of corporate object has no tax consequences as long as it is not accompanied by any change in actual activity.
- In this situation, the company does not lose its right to carry forward losses.
- Tax relief in the event of a change of corporate purpose (and actual activity).
The tax consequences of a change of corporate purpose accompanied by a change in actual activity can be reduced. If no change is made to the accounting entries and the taxation of the items listed below remains possible under the new regime applicable to the company, immediate taxation is not applied:
- Unrealized capital gains on fixed asset items,
- Tax deferred profits (other than regulated provisions),
- And to unrealized profits included in the value of stocks.
The result for the current financial year is taxable and the regulated provisions must be reinstated for tax purposes. The company also loses its right to carry forward losses.
This measure concerns:
- Companies subject, automatically or as an option, to corporation tax at the standard rate on all or part of their activity.
- Companies under the regime of partnerships which carry out an activity relating to industrial and commercial profits, agricultural profits, or non-commercial profits.
As part of the administrative management of your activity as an independent consultant, you will have to declare and pay your VAT as soon as you are subject to the tax. Using the tax refund estimate calculator is important in this case.
We explain in this publication how to manage your VAT according to your tax regime: when should you declare and pay VAT? How to make your declarations? What are the amounts to report on your VAT returns?
Independent consultant: all you need to know about VAT management
Independent consultants in VAT basis
Independent consultants who are subject to VAT exemption have no particular obligations to manage. If you are under this tax regime, you must invoice your customers without applying VAT on the amount excluding taxes and the VAT paid on your expenses cannot be reclaimed.
All invoices issued by an independent consultant exempt from VAT must include the following statement: “VAT not applicable, art. 293 B of the CGI”.
If you are exempt from VAT, you can become subject to VAT:
- either voluntarily, in the event of an option for the payment of VAT,
or following the exceeding of the thresholds of the exemption regime based on VAT.