VAT Glossary
Find definitions of the main terms related to VAT.
VAT Base
The total amount on which VAT is calculated. It represents the taxable basis to which the VAT rate applies.
Reverse Charge
A mechanism where the customer, not the supplier, is liable for the VAT. This applies in particular to intra-community services between professionals.
VAT Credit
Occurs when deductible VAT exceeds collected VAT during a reporting period. This credit can be refunded under certain conditions.
VAT Exemption Threshold
A regime where small businesses are exempt from charging VAT if their turnover remains below certain thresholds. These businesses do not charge VAT but also cannot reclaim VAT on purchases.
VAT Pro-Rata
A coefficient used for mixed activities (subject to and exempt from VAT) to determine the deductible portion of VAT on shared expenses.
Deductible VAT
VAT paid by a business on purchases of goods and services, which it can deduct from the VAT it collects.
Collected VAT
VAT that a business charges its customers and must remit to the State, after deducting any deductible VAT.
VAT Due Date
The point at which VAT becomes payable to the State. This depends on the type of transaction: for goods, it’s at delivery; for services, it’s at payment or invoicing if invoicing occurs first.
For more information on VAT, consult the official tax website or contact a tax advisor.