TLDR: Freelancers can benefit from VAT exemption on the sale of used goods if they were used for their business activities and did not qualify for VAT deduction when acquired. This exemption does not apply to real estate or aircraft.
General conditions for exemption
To qualify for VAT exemption, freelancers must meet the following conditions:
- The goods must have been used for their professional activities.
- The goods must not have qualified for full or partial VAT deduction upon acquisition, import, or self-invoicing.
Eligible goods
VAT exemption applies only to tangible movable property, such as:
- Industrial equipment and tools
- Transportation equipment
- Office and IT equipment
Real estate and aircraft are excluded from this exemption.
Obligations if VAT was initially deducted
If the used good sold had qualified for VAT deduction, the sale becomes taxable, and the freelancer must adjust the initially applied deduction. This adjustment is made by declaring additional deduction rights in the appropriate tax returns.
Sales of capital goods
Sales of capital goods, whether taxable or exempt, are excluded from the calculation of the VAT deduction percentage. This means that the sale of these goods does not affect the determination of the deduction coefficient applicable to other goods and services acquired by the freelancer.
Intra-Community acquisitions
For intra-Community acquisitions of used goods, the exemption applies if the transferor is a taxable person who carries out operations that do not qualify for any deduction. The French freelancer must verify that the seller in the other EU Member State did not deduct VAT on the good.
VAT adjustment
If a good that qualified for VAT deduction is sold, the freelancer must declare the additional deduction rights in the appropriate lines of their tax returns:
- Line 21 of form 3310 CA 3 for businesses under the standard real tax regime.
- Line 27 of form CA 12 (or CA 12 E) for businesses under the simplified tax regime.