Partial taxable persons

12.08.2024 - FAQ on the application of the right to deduct according to the general pro rata or the actual use rule - Circular 2024/C/53 (in French)
23.05.2024 - Déduction de la TVA selon l'affectation réelle - Informations à communiquer dans la déclaration périodique à la TVA

Mixed and partial taxable persons do not have a full right of deduction, but can only deduct VAT on their purchases to the extent that those purchases are used for outputs on which VAT is payable.

Partial taxable persons carry out:

  • transactions that fall within the scope of VAT and
  • transactions that fall outside the scope of VAT

Example: public bodies that, alongside their public tasks, also engage in commercial transactions, e.g. the provision of passenger transport or the letting of rooms.

Partial taxable persons

  • Deduction on the basis of actual use

    Partial taxable persons always determine their right to deduct VAT on the basis of the actual use (Art. 45 VAT Code). You therefore do not need to submit prior notification, unless you are carrying out both taxable and exempt transactions for the transactions subject to VAT.  In this case, you are considered to be a mixed taxable person for these activities and prior notification is compulsory. A partial taxable person will therefore only need to submit a notification if they carry out transactions outside the scope of VAT, transactions within the scope of VAT that are exempt and transactions within the scope of VAT on which VAT is due.

    As a partial taxable person, you must communicate annually certain information relating to the application of the right to deduct according to the actual use. You must do this every year via Intervat, when filing the periodic VAT return as regards:

    • The first quarter ( at the latest on April 20th) or
    • To one of the first three months of the current calendar year (on 20 February, 20 March or 20 April at the latest).

    Provide information on :

    • the final general deduction pro rata for the previous calendar year. This general proportion is calculated solely on the basis of turnover from transactions within the scope of VAT. You therefore only need to complete this if, in the previous calendar year, you were a mixed taxable person for your transactions within the scope of VAT and applied the general pro rata.
    • for the previous calendar year, the proportion, expressed as a percentage, of the tax charged on the transactions :
      • which are exclusively allocated to the business sector(s) whose transactions give rise to full deduction of the tax
      • which are exclusively allocated to the business sector(s) whose transactions do not give rise to a right to deduct tax. These concern both the operational sectors used to carry out exempt transactions as well as the operational  sectors used for transactions outside the scope of VAT.
      • which are simultaneously allocated to both types of operational sectors.
    • Specific pro rata

    If you benefit from the application of the actual use during the calendar year since you become a partial taxable person, you must communicate this information on the basis of forecast for the next 12 months after the start or change of activity, when submitting the periodic VAT return relating to the quarter during which the start or change of activity takes place or relating to one of the first two months following the start or change of activity.