Archive for January 2019

Understanding tax credit and its deduction method

The tax credit is a tax provision that allows you to deduct from your income taxes a portion of your expenses incurred for certain energy improvement work relating solely to your principal residence (secondary residences are therefore excluded from the scheme). The tax credit concerns the acquisition of equipment, but does not include installation work (it therefore excludes labor costs). Taxable or not, each taxpayer can benefit. In the case where the tax credit is greater than the amount of tax owed by the taxpayer, the excess is reimbursed by the public treasury. If the taxpayer does not pay tax, he receives a check corresponding to the expected credit. In order to know more about the tax credit advisers, take the help of the various web sites.

The tax credit for people in a hurry

The finance law for 2005 had created a tax credit dedicated to sustainable development and energy savings, the finance law for 2006 had strengthened, the 2015 law grants tax credits allowing you to repay until 30% of expenses. This measure targets the most energyefficient equipment as well as equipment using renewable energies and it is intended to reinforce the incentive nature of the tax system for the equipment of the main dwelling.

Which mentions should appear on all the documents?

All the arguments related to tax credits in documents, press releases and quotes, using logos and arguments must mention the following application conditions. Tax credits are applicable to the purchase price including all taxes, materials, equipment and equipment listed on the invoice of the company. The tax credit is only granted if the equipment is provided, laid and billed by a professional (labor cost and installation excluded from the tax credit base).

Is it possible to put the “free labor” on an invoice?

Exceptionally (work done for family members for example), a company can supply and invoice materials or equipment eligible for the tax credit with the mention “free installation”, or with a labor billed to a symbolic price.This price of labor obviously out of proportion to its actual cost, is not such as to call into question the benefit of the tax credit, all other conditions being otherwise met. The invoice must include the precise mention of the labor operations carried out and their real value.The transaction can then be considered for the application of VATas constituting a delivery falling within the normal rate of this tax, and may give rise to a VAT reminder for the company supplying the equipment, provided that the invoice does not show the reality of a laying service by this company. It should be emphasized that in the event that the added value would have been concentrated (by the company supplying the equipment or the materials), on the price of the equipment to the detriment of the workforce, in disregard of the rules of the code of consumption and trade, the tax authorities may be required to take any appropriate action to inform the competition, consumer and fraud prevention services. Many cases of tax relief have been observed in recent years.

Taking into account expenses for the tax credit

The tax credit only
takes into account the cost of the equipment and not the cost of the
installation. It concerns the acquisition costs of certain equipment supplied
by the companies that carried out the work and that are subject to an invoice.