The French Government is expecting 100,000 people to register as an auto-entrepreneur by the first semester of 2009. Although the implementation details will not be published before the end of November, this new system is ideal to test a business idea with a minimum risk.
What is an Auto-entrepreneur?
Anyone setting up an entreprise individuelle, also known as micro entreprise, for trade, crafts or services as a main or secondary activity and with a limited turnover of 32,100 euros for services and 80,300 euros for trade, accommodation or food provided on the premises.
What are the advantages of the Auto-entrepreneur?
The key advantage is the régime micro social simplifié which enables you to pay your social charges according to your real turnover either on a monthly or quarterly basis. You will also be able to opt for the régime micro fiscal simplifié in order to pay your income tax according to your turnover. The auto-entrepreneur will also benefit from a taxe professionnelle exoneration for 3 years.
Where do I register as an Auto-entrepreneur?
When setting up a business, you normally have to register with the Registre du Commerce et des Sociétés or at the Répertoire des Métiers. The auto-entrepreneur will either declare his activity online or to the Centre de Formalités des Entreprises (CFE) at the chambre du commerce for trade, chambre de métiers for crafts or URSSAF for services. This new system will start on 1st January 2009.
What is the régime micro social?
An easier way to calculate your social charges based to your real turnover. You will pay 12% of your turnover for trade, accommodation and food served on the premises and 21.3% for services. So if you don’t sell anything, you don’t pay. The percentage for the professions libérales hasn’t been confirmed yet.
How to declare & pay your social charges in France
Every month or quarter you will have to complete a form with your actual turnover and return it to the Régime Social des Independents (RSI) or URSSAF. An online version should be available.
What is the régime micro-fiscal simplifié?
You can also opt to pay your income tax every month or quarter based on your actual turnover. This will represent 1.7% of your turnover for services, 2.2% for professions libérales and 1% for trade, accommodation and food served on the premises. Opting for the régime micro-fiscal simplifié will also enable you to benefit from a taxe professionnelle exoneration for 3 years.
You can opt for this system when declaring your activity to the CFE or within 3 months after registering. Your yearly income before starting the business shouldn’t be over 25,195 euros for a bachelor, 50,000 euros for a couple and 75,000 euros for a couple with a child.
What happens if my turnover goes over the limit?
You can remain within the micro entreprise regime for up to two years provided your turnover doesn’t go over 34,000 euros for services and 88,000 euros for trade, accommodation and food served on the premises. Above these limits you must become TVA registered and will not benefit from the régime micro social and régime micro-fiscal simplifié.
A few questions still need to be answered. For instance if you don’t sell for a few months after declaring your activity, will you benefit from a health cover or will you need to make a minimum contribution to be fully covered?