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Tax scale for business valuation

Glossary

Tax scale for business valuation

In the business world, the question of business goodwilland more rigorously its value, is an essential element to define with precision the budget which will be associated with it before considering any transaction.

To understand this value, the method known as scale method is one of the most commonly used valuation methods.

 

What is the scale method of business valuation?

Consisting in applying a multiplying coefficient to the sales turnover of a business, the scale method has the advantage of giving a quick idea of the value of the business. The formula applied for the calculation is generally applied in the following way:

Average sales including VAT for the last 3 years X coefficient

With a coefficient that can vary according to the sector of activity, note that this method of scales does not take into account certain elements of the company that could however prove to be essential to the valuation of a business.

 

Which tax scale for the valuation of a business ?

Please note that the following tax schedule is not official character. It is therefore only an unofficial scale circulating between professionals but which is in no way confirmed by the tax authorities. It must therefore be interpreted with caution.

Moreover, the results obtained will often have to be corrected to take into account the criteria specific to the business (evolution or importance of the turnover, competitive arrival, rent, commercial lease, operating rights, location, price of equipment and premises, etc.).

 

Tax scale for the valuation of food businesses

Activity labels
Percentage to be applied on annual turnover including VAT
General food

Butchery

Bakery - Pastry - Viennese pastry

Wine cellar

Delicatessen

Chocolate - Confectionery

Creamery

Dietetics-Natural products

Delicatessen
Self-service spice

Cheese shop

Fruit and vegetables

Pastry shop

Fish shop

Frozen food

Convenience store
Supermarket
60/145%

25/60%

50/120%

20/60%

40/90%

80/110%

60/230%

20/50%

100/400%
50/150%

25/60%

15/70%

50/110%

30/50%

15/35%

10/30%
10/40%


Tax assessment scale for automotive trade and repair

Activity labels
Percentage to be applied on annual turnover including VAT
Car accessories

Garage Repair shop
Garage service station
Electricity

Garage VN sales

Garage VO sales

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
Furnishing - Household equipment

Pet shop - Aquarium - Bird shop

Antiques

Medical devices - Orthopedics

Armourer

Office supplies

Bazaar

Costume Jewelry

Jewelry - Watches

Hosiery - Lingerie - Haberdashery

Brocante

Gifts - Tableware - Articles de Paris

Cardboard - Gadgets

Shoes (retail)

Cycles - Motorcycles (sale and repair)

Leather - Furs

Records (sale of)

Household appliances - Hifi - TV - Video - Radio

Earthenware - Porcelain - Glassware

Traditional flowers

Self-service flowers

Art gallery

Herbalism

Musical instruments (sale)

Games - Toys

Bookstore - Stationery

Lingerie Hosiery

Lighting

Marble - Funeral articles

Leather goods - Travel goods

Furniture (sale of)

Haberdashery - Lingerie - Hosiery

Optics

Stationery

Perfumery - Beauty products

Pharmacy

Photo

Press

Ready-to-wear clothing

Ready-to-wear luxury

Hardware - Do-it-yourself - Drugstore

Repair of household appliances

Reprography - Drawing of plans

Locksmithing - Minute stub

Sale of goods

Tobacco - Tableware

Fabrics

Furnishing fabrics

Video store

Wine to go

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 %

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
Marriage agency

Retail Laundry

Hairdressing

Beauty salon

Car rental

Dry cleaning - Laundromat
Laundromat

Retirement home

Animal care - Dog grooming

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
Industrial laundry

Fireplaces (sale and installation)

Kitchens (sale and installation)

Cabinet making - Carpentry

General Electricity

Printing

Gardening - Landscaping

Masonry - Roofing

Plumbing - Heating - Sanitary

Protection - Security - Alarm

Locksmithing - Electricity

Road transport of goods & removals
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
Coffee

Bar - liquor license

Hotel Tourism
Hotel furnished

Café - Tobacco shop / Net tobacco shop

Insurance (Brokerage)

Wine bar

Real Estate Agency

Property manager and syndic

Cinema

Self-service grocery store

Delicatessen

Theater
300 to 1000 X daily revenue including VAT

From 6.000 to 50.000 euros depending on the transfer possibilities

200 to 800 X daily revenue including VAT
250 to 900 x daily revenue including VAT

2 to 4 years of net tobacco discount

0.7 to 1.8 annual commissions

100 to 300 X daily revenue including VAT

0.5 to 1.5 annual net profit

50 to 220 % fees incl. tax/year

40 to 100 X taxable revenue/week

50 to 150 X daily revenue including tax

100 to 400 X daily revenue including tax

900 to 2 000 € the chair

 

As you will have noticed, to evaluate a business requires valuation and negotiation skills as well as the consideration of a number of criteria.

Thus, when it comes to transfer of a businessit is strongly recommended to call upon specialists.

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

By entrusting the management of of your business to the experts XVALexperts, you will benefit from a professional and legal expertise that will prove essential for both parties and you will ensure an optimal transaction.

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