French VAT calculator

How this calculation is made

1. The rate is first CHOSEN from the reference set, never typed at random: standard rate of 20% (CGI art. 278), intermediate rate of 10% (art. 278 bis), reduced rate of 5.5% (art. 278-0 bis) and special rate of 2.10% (art. 281 quater). Each one is a dated, quoted constant of the engine; the “custom rate” option exists for the Corsican and overseas rates, which the reference set does not carry, and raises a warning.
2. In the net-to-gross direction, the amount entered is the base excluding VAT: the gross price is base × (1 + rate). At the standard rate the factor is therefore 1.20; 1.10 at the intermediate rate, 1.055 at the reduced rate and 1.021 at the special rate.
3. In the gross-to-net direction, the calculation is a DIVISION, not a subtraction of a percentage: base excluding VAT = gross price ÷ (1 + rate). Taking the rate off the gross price — “less 20%” on a standard-rated price — is always wrong and lands below the true net base, because the rate applies to the amount excluding VAT, not to the price paid.
4. The VAT charged is then obtained as the DIFFERENCE between the gross and net amounts, once the reconstructed amount has been rounded to the cent. It is not computed separately from the rate: rebuilding both amounts and subtracting them guarantees that net + VAT = gross to the cent, which two independent computations would not.
5. The net VAT payable is finally the VAT charged less the deductible VAT on purchases. A positive figure is a debt to the Treasury, to be carried onto the return for the period; a negative figure is a VAT credit, either carried forward to the next period or refundable on request.

Glossary

Excluding VAT (HT)

Amount of a transaction before VAT. It is the base the rate applies to, and the amount that appears in the company's profit and loss account: VAT is neither income nor expense, only a sum collected on behalf of the Treasury.

Including VAT (TTC)

The amount excluding VAT increased by the VAT, that is the price actually paid by the customer. It is the only amount the final consumer sees, and the one to start from when rebuilding a base excluding VAT.

VAT charged (output VAT)

VAT invoiced to customers on the period's sales. It does not belong to the business: the business collects it on behalf of the Treasury and pays it over, less the VAT it has itself borne on its purchases.

Deductible VAT (input VAT)

VAT borne on purchases of goods and services used for the taxable activity, which the business sets off against the VAT it charged. The right of deduction requires a proper invoice showing the VAT, to be kept in case of an audit.

VAT credit

The situation where deductible VAT exceeds the VAT charged over a period. The balance in the company's favour can be carried forward to later returns or refunded on request, subject to threshold and frequency conditions.

Conversion factor

The 1 + rate factor that turns an amount excluding VAT into an amount including VAT: 1.20 at the standard rate. The reverse move is a division by that same factor, never an application of the rate to the gross price.