TLDR: The TCA is a 1% tax on advertising expenses (excluding VAT) incurred in the previous year by VAT-taxable persons whose turnover exceeds €763,000. It applies to printed advertising, announcements, and insertions, with exclusions for activities outside the scope of VAT or exempt activities. The declaration is made via annex No. 3310 A, attached to the VAT return, with specific provisions for French Guiana.
Who is liable for the TCA?
The TCA applies to any VAT-taxable person whose turnover in the previous calendar year exceeds €763,000 excluding VAT and who has incurred eligible advertising expenses. The threshold is assessed at the level of the potentially liable person.
Companies involved in the production or distribution of printed advertising on behalf of advertisers, or publishing free newspapers, are subject to the tax only for expenses related to promoting their own activity.
Organizations representing a business sector or presenting an economic or social interest are liable for collective promotion operations.
Exclusions: Public law legal entities are not subject to the tax for expenses related to activities outside the scope of VAT. Non-profit organizations are exempt for promotion expenses incurred as part of VAT-exempt activities. Expenses for activities not covered by these exclusions must be included in the tax base, regardless of their VAT regime.
Which expenses are taxable?
The taxable base includes the VAT-exclusive value of advertising expenses incurred in the previous year, reduced by price reductions obtained from suppliers and explicitly relating to these expenses. The following are concerned:
- Printed advertising (brochures, flyers, catalogues, letters, etc.) intended to promote the image, products, or services of the advertiser, distributed in mailboxes, by hand, via postal service, or made freely available to the public.
- Announcements and insertions in free newspapers (distributed free of charge to more than 50% of their circulation).
- Unaddressed catalogues, distributed free of charge or made freely available to the public.
Exclusions: Expenses incurred by advertising agencies already liable for the tax, as well as announcements and insertions of a purely informational nature (e.g., job offers).
What is the rate and how is the TCA calculated?
The TCA rate is set at 1% of the VAT-exclusive amount of taxable advertising expenses. The tax is calculated on expenses deductible from taxable income, regardless of the closing date of the financial year.
How to declare and pay the TCA?
The TCA is declared and settled on annex No. 3310 A (CERFA No. 10960), attached to the VAT return No. 3310 CA3 (CERFA No. 10963). It is paid at the same time as the VAT return for March (or the first quarter for taxpayers filing quarterly returns).
Special case for French Guiana: Taxpayers established in French Guiana must declare the tax on form No. 3310 A, available from the Service des impôts des entreprises in Cayenne, and submit it with payment before April 25 of the year for which the tax is due.
What are the obligations and responsibilities?
The TCA is collected and controlled according to the same procedures, penalties, guarantees, and privileges as VAT. The proceeds are allocated to the State’s general budget.
Taxpayers must allocate their expenses under their own responsibility and be able to justify this allocation upon request by the tax authorities.
Which documents must be kept?
Supporting documents for advertising expenses (invoices, contracts, etc.) must be retained to allow the tax authorities to verify the accuracy of the declarations. Taxpayers must, in particular, be able to identify the expenses subject to the tax, both in terms of their nature and amount.