Very small businesses subject to income tax can benefit from the "MICRO FISCAL" and "MICRO SOCIAL" schemes. We indicate below as well as the main characteristics of this scheme as well as the conditions to benefit from it.
- CONDITIONS OF ACCESS TO THE MICRO-COMPANIES REGIME:
- Registration with an administration:
When creating a sole proprietorship or an "E.I.R.L.", the creator must register with:
-“Greffe du Tribunal de Commerce” if he carries on a commercial activity,
-“Chambre de Métiers” if he carries a craft activity,
-“Centre de Formalités de l’URSSAF” for liberal professions,
-« Mutualité Sociale Agricole » (M.S.A.) if he is farmer.
- The legal structure:
Only sole proprietorships and "E.I.R.L" subject to income tax as well as "E.U.R.L." whose manager is the sole partner can benefit from the "MICRO" plan. Thus, all companies (with the exception of the E.I.R.L. mentioned above) are excluded.
- Excluded activities:
The following activities are excluded from the "MICRO" scheme:
- Rental activities of equipment or durable consumer goods,
- Stock market operations,
- Associations and nonprofit activities,
- Real Estate Broker and Real Estate Agents.
- Turnover limits:
Annual turnover must not exceed the following limits:
- € 170 000 H.T. (without VAT) for the activities of selling goods or providing housing,
- € 70 000 H.T. for service providers and the liberal professions,
- € 82 200 H.T. (average turnover over three years) for farmers.
- FUNCTIONING OF THE TAX SYSTEM OF THE MICRO-ENTERPRISE:
- Simplified formalities:
Companies placed under this regime should only keep a journal with daily details of their receipts. Those engaged in the sale of goods must also keep a register detailing their purchases.
The entrepreneur only indicates the amount of his annual turnover in the appropriate frame of his general income tax return (model N ° 2042). His taxable profit and the amount of his tax will be determined by the tax office of his domicile.
In some cases, the entrepreneur may opt for a lump sum payment of his income tax. If this option is made, the tax will be paid monthly or quarterly at the rate of:
- 1% of turnover for the activities of selling goods or providing housing,
- 1.7% of turnover for service providers,
- 2.2% of turnover for non-commercial income holders (B.N.C).
This option is not applicable to farm incomes.
- Determination of taxable profit:
The micro entrepreneur is exempt from the filing of a professional declaration of result for the purposes of “Bénéfices Industriels et Commerciaux (B.I.C.)”,” Bénéfices Non Commerciaux (B.N.C.) or Bénéfices Agricoles (B.A.). As we wrote above, he only shows the amount of his turnover on his annual tax return.
The net taxable profit is determined by the tax administration which applies a deduction on the amount declared. This abatment, which includes all operating expenses, amounts to:
- 71% of turnover for the sale of goods or supply of housing,
- 50% of turnover for service delivery activities,
- 34% of turnover for the liberal professions,
- 87% of the average turnover of the last 3 years for agricultural profits.
Companies subject to the "MICRO" tax regime cannot deduct deficits.
- VAT franchise (VAT exemption) :
Companies taxed under the "MICRO" scheme automatically benefit from the VAT exemption scheme. Thus, the company does not charge VAT to its customers, but it cannot recover the VAT it pays to its suppliers on its purchases, expenses and investments. This regime can be penalizing for activities requiring expensive equipment.
The company must display on its invoices the following statement:" TVA NON APPLICABLE ARTICLE 293B DU C.G.I.”.
The thresholds of turnover allowing to benefit from the franchise are of:
- € 82 200 before tax (realized the year before) for the activities of sale or supply of housing,
- € 33 200 before tax (realized the year before) for the activities of service delivery and liberal professions.
Farmers are in principle subject to VAT under the flat-rate reimbursement scheme. But they may be subject to the simplified VAT system (where the amount of turnover calculated over two consecutive years exceeds € 46,000) or on option. In addition, the flat-rate reimbursement scheme is not applicable for certain agricultural professions.
When the turnover of the business exceeds the thresholds above, the "MICRO" regime remains applicable as long as the company has not reached the thresholds of maximum turnover for the application of the "MICRO"
- Contribution on value added (C.V.A.E.):
Companies subject to the "MICRO" regime whose turnover is between € 152,500 and € 170,000 are subject to the "C.V.A.E.".
The amount of their added value for the calculation of "C.V.A.E." is set at 80% of the difference between the amount of the receipts and the purchases made during the tax year.
It should be noted that these companies must declare their added value but are liable for the "C.V.A.E." only when their turnover exceeds € 500,000.
- FUNCTIONING OF THE "MICRO SOCIAL" REGIME:
Since 2016, this scheme automatically applies to all entrepreneurs subject to the tax regime of the "MICRO" company.
This plan takes into account the following contributions:
- Maternity health insurance,
- Retirement insurance,
- Invalidity death,
- Family allowances (allocations familiales),
- C.S.G. and C.R.D.S.
The entrepreneur must declare his turnover on the website www.lautoentrepreneur.fr each quarter or month according to his option.
Contributions are paid on a lump sum basis as a percentage of turnover which is:
- 12.8% for the activities of sale or supply of housing,
- 22% for service or liberal activities.
At these rates is added the contribution to training at the rate of 0.1 to 0.3% depending on the activity.
This scheme does not exist for agricultural activities which in any case continue to contribute on the basis of the net profit determined by the "MICRO B.A." method.
Any operator who thinks that the "MICRO" regime is not advantageous for him can opt for a real tax regime. The disadvantage of this scheme may be mainly one of two causes:
- The amount of the abatement is lower than the amount of the actual costs incurred by the business,
- The VAT exemption is penalizing for the company as in the cases that we have seen in chapter II-3 °.
We are of course at your disposal to assist you in choosing the most appropriate plan for your situation.