You’ve registered a business in France, either as a micro entrepreneur, enterprise individuelle or a French incorporated business (EURL, SARL, SAS, SASU). As a business owner, there are 5 things to keep an eye on, to avoid bad surprises or last-minute fix-it rush. Consider this article as your homework to be done before 2025.
If you read this article later on, this still applies to you. I recommend business owners in France to look at these 5 things anytime from September each year.
1 - Check the VAT threshold
A lot of my Power Hour calls from June to December relate to VAT issues. Expatriates having registered as a micro-entrepreneur or unincorporated business, and about to go above the VAT threshold. With questions such as:
- Have I gone over the VAT threshold yet?
- Oops, I did. What do I need to change?
- How do I get my VAT number?
- What are the different VAT regimes and how do I choose?
- Does it sound familiar?
Here’s your 1st homework:
- For Micro-entrepreneurs add up your turnover so far this year (using the calendar year)
- For incorporated businesses add up your turnover so far this fiscal year.
- Compare this turnover to the VAT threshold
What are the VAT thresholds?
- If you are in your first business year €36,800 for services and 91,900€ for products/shops/e-commerce.
- From your 2nd year in business, your yearly VAT threshold goes up to 39,100€ for services and 101,000€ for products.
- Watch out! Any invoice from the 1st euro above this threshold needs to be added.
- Warning: The VAT thresholds will change in 2025! I know…more to come on this soon.
2 - Micro Entrepreneurs - Check your threshold
This homework is specific to micro entrepreneurs only. Check out your turnover threshold. There are 2 super important rules, which are very important if you want to remain a micro entrepreneur next year:
Rule #1 = the maximum yearly turnover threshold.
You may already know that your turnover is capped in year one. This means that if you go above this threshold by 1€, next year you will be switched to Entreprise IndividuelleI réel simplifié. Make sure you track your yearly turnover so far this year to avoid any bad surprises. The good news is that after your first year in business, you can go way above this turnover threshold for two consecutive years without having to come out of the micro Entrepreneur. This may change in 2025 with the new loi de finance.
Rule #2 = the pro-rata rule.
This rule is the toughest one and most people don't even know about it. There is a pro-rata rule for your first year in business. This means that, for instance, for a service-based activity, the maximum yearly turnover threshold is 77,700€ for a full year. But we’ll be using the pro-rata rule if you start your business halfway through the year. For instance, if you created your business on 1st January 2024 as a coach, you have 77,700€ turnover. But if you create on the 1st of July, you only have 39 063€ max for this year.
3 - Micro Entrepreneurs - Keep an eye for your Taxe Foncière
This one is about personal taxes for property owners in France. September and October are when we receive and pay our housing taxes:
- Taxe Foncière, which is a tax for property owners in France on your main home, and
- Taxe d’Habitation, which is the tax for property owners in France with secondary homes, or for people who aren’t residents in France, but own a property here.
If you are living in France and this is your main home, you're looking out for your Taxe Foncière. And if you are living in the US and you have a holiday home in Dordogne, you are looking for your Tax d’Habitation. And if you are living in France and you have two homes, you're looking for both Taxe Foncière and Tax d’Habitation.
4 - Validate and Pay your CFE Tax
We are back to business homework and you want to keep and eye for your Contribution Foncière des Entreprises tax (CFE). Anyone with a business in France has to pay Contribution Fonciere Entreprises from their second year in business. And we're talking about calendar year here.
This tax bill is about €150 to €600, and will NOT be sent by postal mail but added to your business impots.gouv.fr account. Yes, that's the red one. Don't wait for it in the post because the tax office stopped sending them by post two years ago.
You have to go on your business impots.gouv account. Do you remember the blue account, where you declared your French income tax “impot sur le revenu”? If you go to that same website, you will spot the red section, which is the account for your business.
If you haven't created this account yet, you need to go and create it now in order to check and pay your CFE bill from October.
Take action now:
- Go and create your business Impots.gouv.fr account if you haven't done it yet.
- It's a two-step process:
- You start the creation online.
- Then you have to wait for an activation code by post.
- Note in your calendar that you will have to go back to this site and check your CFE bill in October or November time.
- You will have to check the CFE bill AND validate the payment - meaning that you will allow the tax office to take the money on the 15th of December this year.
5 - Business health check
Now is the time to start adding your business numbers, and start brainstorming what you want to do in 2025
- Track your turnover, your expenses and your projections for this year.
- What are your projects for next year - same thing asses your time, sales and expenses.
Then ask yourself:
- Does your current business type or regime fit?
- Is it time to change for something else?
- What would be the next option?
- Look for reliable information, take some time to think and make a decision.
Here’s an idea of the questions we go through with my customers when I do a business health check for a Power Hour:
- We go through their current business setup.
- Check that everything is in order (invoices, admin routine, declarations, tax options)
- We talk about their future projects.
- Then I will explain their options for next year.
- It then gives them time to think and plan necessary changes for next year. And I’ll introduce them to an English-speaking accountant if necessary.
If you need help with this, you can book a Power Hour.
We’ve seen the 5 things you need to do before the end of the year. If you want to know more about CFE, Taxes foncière and taxe habitation which I’ve mentioned - watch this next video LINK
Make sure you subscribe to my newsletter to be updated on these topics and new changes due with the 2025 budget Loi de Finance. A few topics will directly impact freelancers in France: new VAT threshold, new rules for gites and AirBnB (LMNP, thresholds), and micro entrepreneurs.
