Last week Frederic Lefebvre, Minister for SMEs, announced that auto-entrepreneurs with no turnover will not pay the Contribution Fonciere des Entreprises (CFE) tax. He also requested for the law to be amended in order to exempt all auto entrepreneurs from CFE for 3 years, whether or nor they opted for the income tax paid at source.
The Senat confirmed on 6th December that they were in favour of a law amendment enabling all auto entrepreneurs to be exempt of CFE for 3 years. This amendment still needs to be validated by the Parliament before it can be applied retrospectively to 2010. However, senators have also made some suggestions to this new amendment. They suggested that all auto-entrepreneurs should make a monthly or quarterly turnover declaration even when their turnover is nil. They also suggested the addition of an extra fixed rate charge based on the turnover for formation professionnelle, i.e. contribution for professional training.
So what does it mean for your business?
If you have declared some turnover in 2010 and since the new law has not been voted yet, this means that you will have to pay the Contribution Fonciere. Once the law is passed, probably in 2011, you will be reimbursed.
It is quite likely however that this tax will reappear under a different name… formation professionnelle. The whole controversy was caused because the CFE was not based on the auto entrepreneur’s turnover and was therefore quite unfair for people with low turnover. The new amendment should see an extra percentage added to the auto-entpreneurs’ fixed rate charges, to pay towards formation professionnelle. This will be discussed further by the Government on the 21st December. I will keep you posted as and when the announcements are made.