BUSINESS VALUATION TAX SCALE 2024

In many business sectors, the precise assessment of the value of goodwill is crucial in the process of increasing the value of a company or business...

The assessment of this value is usually carried out using the " tax" scale technique, one of the most widespread approaches to valuation, particularly in the context of initial negotiations or exchanges between professionals in the same sector.

What is the scale method of business valuation?

This method involves the use of a multiplication factor on the net sales income of a business, offering an efficient way of acquiring a quick estimate of its value. The calculation procedure is usually implemented as follows:

Average net sales revenue for the previous three years X factor

The factor varies according to the different fields of activity, but it is important to note that the scale method can omit crucial aspects of the business that could be decisive in the valuation of goodwill (equipment, reputation, existing team, etc.).

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What is the tax scale applicable to the valuation of a business?

It is essential to specify that the tax scale mentioned below has no official status. Rather, it represents an unofficial reference scale shared among professionals, and is in no way validated by the tax authorities. It should therefore be interpreted with caution.

What's more, it is often necessary to adjust the results obtained to reflect the specific features of the business (sales revenue trends or size, competition, rent, commercial lease, operating rights, location, cost of equipment and space, etc.).

Tax valuation scale for food businesses  

Activity labels	Percentage to be applied on annual turnover including VAT
General food Butchery Bakery - Patisserie - Viennoiserie Wine cellar Delicatessen Chocolaterie - Confiserie Creamery Dietetics-Produits naturels Epicerie fine Self-service spice Fromagerie Fruits et légumes Pâtisserie Poissonnerie Frozen foods Supérette Supermarket	60/145 % 25/60 % 50/120 % 20/60 % 40/90 % 80/110 % 60/230 % 20/50 % 100/400% 50/150% 25/60 %1 5/70 % 50/110 % 30/50 % 15/35 % 10/30 % 10/40% THE COMPANY'S SALES AND MARKETING TEAMS ARE AT YOUR SERVICE.

 
Tax assessment scale for automotive trade and repair

Activity labels	Percentage to be applied on annual turnover including VAT
Car accessories Garage Repair workshop Garage service station Electricité auto Garage vente VN Garage vente VO Service station	15/35 % 35/50 % 35/50% 30/60% 10/35 % 5/30 % 15/50 %

 
Tax valuation scale for restaurant and hotel businesses 

Activity labels	Percentage to be applied on annual turnover including VAT
Discotheque Restaurant Fast food Creperie Pizzeria Tearoom	180/310 % 60/190 % 40/110 % 60/110 % 45/120 % 55/165 %

 
Tax valuation scale for retail businesses  

Activity labels

Percentage to be applied on annual turnover including VAT

Furnishings - Household equipment Pets - Aquariums - Birds Antiques Medical devices - Orthopedics Armurier Office supplies Bazaar Costume jewelry Watchmaking jewelry Haberdashery - Lingerie - Haberdashery Brocante Gifts - Tableware - Articles de Paris table - Articles de Paris Carterie - Gadgets Shoes (retail) Cycles - Motorcycles (sale and repair) Leather - Furs Discs (sale of) Domestic appliances - Hifi - TV - Video - Radio Earthenware - Porcelain - Glassware Traditional flowers Self-service flowersservice Art gallery Herbalism Musical instruments (sale) Games - Toys Books - Stationery Lingerie Stationery Lighting Marbleware - Funeral articles funerary Leather goods - Travel goods Furniture (sale of) Haberdashery - Lingerie - Hosiery Opticians Stationery Perfumery - Cosmetics Pharmacy Photo Press Ready-to-wearà-porter vêtements Prêt-à-porter luxe Quincaillerie - Bricolage - Droguerie Réparation d'appareil électroménager Reprographie- Tirage de plans Serrurerie - talon minute Solderie Tabac - Tabletière Tissus Tissus ameublement Vidéoclub Vins à emporter

30/50 % 50/90 % 45/100 % 15/40 % 35/55 % 30/60 % 15/50 % 40/120 % 30/70 % 40/80 % 40/70 % 30/70 % 40/90 % 40/90 % 15/40 % 25/50 % 15/60 % 10/60 % 45/75 % 45/90 % 30/60 % 50/200 % 30/90 % 5/40 % 20/60 % 30/130 % 40/80 % 10/40 % 35/120 % 60/200 % 20/80 % 20/100 % 50/120 % 45/100 % 45/95 % 70/110 % 20/100 % 50/120 % 45/100 % % 40/80 % 10/40 % 35/120 % 60/200 % 20/80 % 20/100 % 50/120 % 45/100 % 45/95 % 70/110 % 40/115 % 25/60 % 35/90 % 60/170 % 20/60 % 20/60 % 15/60 % 40/100 % 25/45 % 80/160 % 10/110 % 20/80 % 30/100 % 100/400 %

 
Tax valuation scale for leisure businesses  

Activity labels	Percentage to be applied on annual turnover including VAT
Travel agency	25/100 %

 
Tax scale for the valuation of goodwill in business services

Activity labels	Percentage to be applied on annual turnover including VAT
Cleaning - Guarding	25/90 %

  
Tax scale for valuing health-related goodwill

Activity labels	Percentage to be applied on annual turnover including VAT
Ambulances	55/85 %

  
Tax scale for the valuation of business assets related to personal services 

Activity labels	Percentage to be applied on annual turnover including VAT
Agence matrimoniale Blanchisserie de détail Coiffure Institut de beauté Location véhicules auto Pressing - Laverie Laverie automatique Maison de retraite Soins animaliers - Toilettage canin	40/60% 40/70% 50/120% 50/80% 30/60% 70/130% 80/130% 90/110% 50/90%

  
Tax scale for the valuation of SME goodwill 

Activity labels	Percentage to be applied on annual turnover including VAT
Blanchisserie industrielle Cheminées (vente et installation) Cuisines (vente et installation) Ebénisterie - Menuiserie Electricité générale Imprimerie Jardinerie - Paysagiste Maçonnerie - Toiture (Couverture) Plomberie - Chauffage - Sanitaire Protection - Sécurité - Alarme Serrurerie - Electricité Transports de marchandises & déménagements	40/80 % 15/30 % 15/40 % 15/60 % 10/30 % 5/40 % 10/60 % 10/25 % 10/40 % 25/75 % 20/50 % 50/90 %

Although the scale method is the most commonly used for the valuation of a business, other types of indicators can be taken into account for certain sectors of activity: 

Activity labels

Indicator

Café Bar - Licence de débit de boisson Hotel Tourisme Hotel meublé Café - Tabac / Remise nette tabac Assurances (Courtage) Wine bar Agence immobilière Administrateur de biens et syndic Cinéma Self-service grocery store Delicatessen Theatre

300 to 1000 X daily takings incl. VAT From 6,000 to 50.000 depending on transfer possibilities 200 to 800 X daily takings incl. VAT 250 to 900 X daily takings incl. VAT 2 to 4 years net tobacco discount 0.7 to 1.8 annual commissions 100 to 300 X daily takings incl. VAT 0,5 to 1.5 annual net profit 90 to 250 % fees incl. tax/year 40 to 100 X taxable revenue/week 50 to 150 X daily revenue incl. tax 100 to 400 X daily revenue incl. tax 900 to €2,000 per chair

As you will have seen, to evaluate a business requires valuation and negotiation skills, as well as the ability to take into account a range of criteria.  

So, when it comes to selling a business, it's highly advisable to call on the services of specialists.  

Since the objectives of the seller of the business and the buyer may be diametrically opposed, impartiality can sometimes prove complex.  

By entrusting the valuation management of your business to the XVAL expertsexperts, you will benefit from professional and legal expertise that will prove essential to both parties, and ensure an optimal transaction: