French General Tax Code
In forceI. - For their agricultural operations, farmers are placed under the flat-rate reimbursement scheme provided for in Articles 298 quaterand 298 quinquies. They are exempt from payment of value added tax and from the obligations incumbent on taxable persons.
They may, however, opt to be taxed under the simplified scheme set out below:
1° They are exempt from the obligation to make the declaration provided for in Article 287 and are only required to file a return each year, no later than the second working day following 1 May, setting out the details of the liquidation of the value added tax relating to the previous year. If their financial year does not coincide with the calendar year, they may, by option, file an annual return corresponding to this financial year before the fifth day of the fifth month following the end of the financial year. The option must be made before the start of the first financial year for which it is taken up. The procedures for exercising this option are laid down by decree in the Conseil d'Etat. In addition, farmers must, in respect of the period between 1 January and the last day preceding the opening date of the first financial year concerned by the option, file a declaration between a date set by decree and no later than the second working day following 1 May, and the fifth day of the fifth month of that financial year ;
2° The value added tax due on sales made by them becomes chargeable when the deposits or the price are collected; the value added tax due on intra-Community acquisitions made by them becomes chargeable under the conditions set out in d of 2 of Article 269 ;
3° They may immediately deduct the tax on non-capital goods and services from the tax due for the quarter in which the right to deduct arose;
4° Subject to the measures provided for in 1° to 3° and Articles 1693 bis and 1785, farmers liable for value added tax are subject to all the provisions set out in this code.
II. - The following are automatically subject to the simplified scheme provided for in I:
1° Farmers whose activities are, by their nature or scale, comparable to those carried out by industrialists or traders, even if these operations constitute an extension of the farming activity, with the exception of those operations considered to be part of the usual and normal practices of farming.
2° (repealed)
3° For their agricultural activities, persons who carry out purchases, deliveries, imports, intra-Community acquisitions or intermediation services relating to live animals for slaughter and charcuterie.
4° Persons who carry out deliveries, imports, intra-Community acquisitions or intermediation services relating to live butchery and charcuterie animals.
5° Farmers, where the average revenue from all their farms, calculated over two consecutive calendar years, exceeds €46,000. The liability takes effect from 1 January of the following year.
When the average revenue excluding value added tax, calculated over three consecutive annual tax periods, falls below €46,000, farmers may cease to be subject to the simplified scheme from 1 January or the first day of the following financial year, provided that they notify the tax department before 1 February or before the first day of the second month of the financial year and that they have not benefited, during these three annual tax periods, including, where applicable, during the period referred to in the last sentence of the l° of I, from a tax credit refund.
For joint farming groups where all the members effectively and regularly participate in the group's activity through their personal work, the average revenue referred to in the first and second paragraphs is set at 60% of the limit provided for individual farmers multiplied by the number of members.
However, it is equal to the limit provided for individual farmers multiplied by the number of members when the group's average revenue is less than or equal to €138,000.
6° Lessors of rural property who have exercised the option authorised by 6° of Article 260.
7° For services rendered to their members, cooperatives for the use of agricultural equipment and artificial insemination cooperatives.
II bis. - By way of derogation from the provisions of I and II, in the event of the death of a farmer subject to the simplified scheme, this scheme continues to apply under the same conditions to the spouse, heir or joint owner taking over the farm.
III. - The terms and conditions of the option referred to in the second paragraph of I are laid down by decree in the Conseil d'Etat. This decree may, in particular, provide for the identification or marking of animals and the keeping of stock records relating to them.
The characteristics of the activities that are compulsorily subject to value added tax pursuant to II, are specified as necessary by decree in the Conseil d'Etat, after consultation with the professional organisations concerned.
III bis. - Ancillary commercial and non-commercial income, subject to value added tax, earned by a farmer subject to the simplified scheme provided for in I for his agricultural operations may be taxed under this scheme when, in respect of the period covering the previous three tax years, the average annual ancillary income, including tax, for these three years does not exceed €100,000 and 50% of the average annual income, including tax, from his agricultural activities, in respect of the said years.
By way of derogation from the previous paragraph, incidental commercial and non-commercial income, subject to value added tax, earned in respect of the first three years of business by a farmer subject to the simplified scheme provided for in I for his agricultural operations may be taxed under this scheme subject to compliance with the provisions referred to in the third paragraph of the article 75.
IV. - In the event of the transfer or cessation of their activity, farmers are required to submit the declaration provided for in 1° of I or, where applicable, in the fourth paragraph of I of Article 1693 bis within thirty days.
V. - (repealed)
