This article sets out the principles of taxation of micro-enterprise that can elect to individual entrepreneurs. From a social point of view, micro-entrepreneurs fall under the Insurance Scheme for self-employed (RSI). Their social contributions can be calculated and paid according to the mainstream system or as the regime of micro-social.
1 – BUSINESSES THAT CAN MAKE THE ELECTION
The individual professionals and sole proprietorships whose annual turnover shall not exceed:
81 500 euros * for operators whose principal business is to sell merchandise, goods, supplies of food to take away or eat in, or provide accommodation (hotels, guest houses, cottages, furnished tourism)
32 600 euros * for other providers of services in industrial and commercial profits (BIC) and professionals taxed under non-commercial profits (BNC).
* These thresholds are reviewed annually. These companies should also benefit from the franchise tax base or be exempt from VAT in respect of their business. The express election for payment of VAT thus entails the exclusion of this plan.
Which businesses and activities excluded from this plan?
– companies,
– non-for-profit organizations,
– real estate dealers, developers and real estate agents,
– some manufacturers,
– the leasing of equipment or consumer durables
– operations on financial markets,
– public officials and corporate.
How are these limits of 81 500 and 32 600 euros computed?
NON COMMERCIAL INCOME (BNC): revenue collected during the year.
COMMERCIAL INCOME (BIC): the limit is appreciating against the revenue gained from the claims. However, interested parties may take into account only the income actually received (as for the BNC) provided to proceed in the same way every year.
These limits should be adjusted when the activity starts or stops during the year (except for intermittent or companies called “seasonal”).
One should note: The threshold of turnover should be adjusted in proportion to the time of the activity being carried out, if you set up your business during the year.
For example, a consultant who began operating on 1 April 2011 the legal form of sole proprietorship, can benefit from the micro-enterprise under 2011 if revenues do not exceed: (32 600 x 275 days) / 365 days = 24 562 euros.
What happens if the turnover exceeds these thresholds ?
The company is placed under the micro-enterprise during the current year and the following year if itsr turnover does not exceed:
– 89 600 euros for the supply of goods, sales to take away or eat on site or the provision of accommodation,
– 34 600 euros for other services.
The applicable tax regime to the company after this period will depend on the level of revenue it generates and whether it exceeds the thresholds of 81 500 or 32 600 euros:
– If its turnover is less than 81,500 or 32,600 euros, the company will always be subject to the regime of micro-enterprise from 1 st January of the following year,
– If his turnover is between 81 500 and 89 600 euros for a business of supply of goods, supplies of food to go or to eat in or provide accommodation or between 32,600 and 34,600 euros for other activities, the company switches to itemized tax regime from 1 st January of the following year.
2 – VAT
The contractor submitted to the tax system of micro-enterprise does not charge VAT, but beware it does not recover the VAT paid on its own purchases or investments.
In fact, to be placed under the microphone, the contractor must either be exempt from VAT because of its activity, or benefit from the franchise tax base.
3 – INCOME TAX
The micro-entrepreneur has the choice between two methods of calculation and payment of tax on income:
– The typical micro-enterprise regime
– The flat tax discharge (optional).
If the contractor achieves a turnover below the threshold of micro-enterprise, it can also waive the application of the tax system and opt for an itemized regime of taxation.
> THE TYPICAL MICRO REGIME
This system automatically applies, unless they opt for a real regime of taxation or tax payment for discharge.
In this case, the contractor is exempted from establishing a tax return under the BIC and BNC. He just needs to focus on its consolidated statement of income (form 2042) the amount of its turnover (BIC) or revenues (BNC) as well as any more or less realized capital gains or incurred during the year concerned .
Taxable income is determined after a deduction allowance of:
– 71% of revenues for the activities of buying and selling, and supply activities of housing
– 50% of revenues for other commercial activities
– 34% of revenue for professionals.
To determine the income tax payable, the lump sum benefit is calculated and then submitted, along with other household income tax at progressive rates in increments of income tax.
> THE ELECTION TO DISCHARGE THE TAX PAYMENT
The micro-entrepreneur may opt for this mode of calculation and payment of income tax if it meets the following conditions:
– It benefits from the micro-social system ,
– Income tax reference of the penultimate year or less , for a share of the family quotient, the upper limit of the third tranche of the tax schedule on income from the previous year, for year 2011, 26 030 euros.
This limit is increased by 50% or 25% by half or quarter share of additional share.
The option to discharge the tax levy must be filed with the Insurance Scheme for self-employed (RSI) or from the website www.lautoentrepreneur.fr :
– Not later than 31 December of the previous year,
– Or, for new micro-entrepreneurs, not later than the last day of the third month following the creation.
Each month or quarter, whichever is chosen for the micro-social system, the micro-entrepreneur said turnover for this period, and address the relevant regulation to the income tax corresponding to their business. The levy will be:
– 1% of net monthly or quarterly for operators whose main business is to sell merchandise, goods, supplies and food to go or to eat in or to provide accommodation (hotels, guest houses, cottages, furnished accommodation)
– 1.7% of net monthly or quarterly for other service providers within the BIC
– 2.2% of net monthly or quarterly for professionals within the NLC.
Returns and payments can be made on paper or online from the site www.lautoentrepreneur.fr
Without sales, no return and no payment is to be performed. In this scheme, the income tax is paid on a permanent basis as and when the collection of revenue. Unlike the typical diet of micro-enterprise, income from self-employment are not subject to the sliding scale in increments of income tax.
> THE ELECTION FOR A REAL REGIME OF TAXATION
A company within the scope of the regime of micro-enterprise has the option to elect to be taxed under a real regime of taxation before:
February 1 of the first year for which it wishes to benefit from this scheme if it falls within the BIC
April 30 next year if it falls within the BNC (option for the regime controlled the statement).
The option is valid for 2 years until the company is continuously in the field of application of the microphone. It is automatically renewed every 2 years.
4 – Territorial economic contribution (formerly Business Tax)
Reminder: the business tax was abolished on 1 January 2010 and was replaced by the territorial economic contribution (TEC) made up of :
– The premium real estate companies,
– And the contribution on value added.
The micro-entrepreneur is liable to the first one. It is never liable for the year during which the business is set up.
5 – PAYROLL
Companies placed under the “micro” are exempt from payroll tax for wages paid. However, the contractor is liable for payroll taxes owed for hiring employees.
6 – ACCOUNTING REQUIREMENTS
Keeping a journal detailing the revenue. This book is chronologically mention the amount and source of revenue collected, broken down into cash settlements of other regulations. It must also provide references of documents.
Keeping a record with summary details of purchases for the business of selling goods, articles, supplies and food to take away or eat in, or providing housing. This register must distinguish between cash settlements of other regulations, and state the reference documents.
Conservation of all invoices and documents relating to purchases, sales and services they have earned.
The taxable benefit of the exemption in VAT base should issue invoices bearing the words “VAT-exempt, Section 293 B of the CGI.
Reference
Article 50-0 of the French Tax Code
Article 102b of the FTC