The auto-entrepreneur tax scheme explained

A popular option with new businesses, France’s auto-entrepreneur scheme has undergone a number of changes recently. We take a closer look at the scheme

What is an auto-entrepreneur?

The auto-entrepreneur scheme was introduced in 2009 as part of France’s microtax regime. It applies to a one-person business of a commercial/sales, skilled trade/craft or professional nature with an annual turnover below €82,200 for sales and €32,900 for services. On 1 January 2015, it was merged into the micro-enterprise scheme.

What will the changes be?

Previously, auto-entrepreneurs paid no registration fees and were exempt from the professional tax (CFE – cotisation foncière des entreprises) for three years. However, as of 1 January 2015, auto-entrepreneurs must pay registration fees and CFE. New businesses are exempt from CFE for their first year.

What are the advantages?

The main advantages of the auto-entrepreneur scheme are the lower social charges and that they are applied on a pay-as-you-earn basis, calculated from your actual turnover in previous months. This will continue under the new rules.

What are the disadvantages?

You don’t pay full pension contributions, and you aren’t covered for sick days or holidays or eligible to receive unemployment benefit. Social charges are calculated on your incomings, not your profits, so if you have a lot of costs and aren’t actually making much profit you will still have to pay social charges.

How do I register?

Registration is simple. You merely have to complete an application form and provide identification, either online, by post or in person at the relevant chambre de commerce, chambre de métiers or URSSAF (Union de Recouvrements des Cotisations de Sécurité Sociale et d’Allocations Familiales – the organisation responsible for social security payments). You will then receive your business registration number, called a SIREN. If you are an artisan you will also have to attend a five-day business start-up training course that you will have to pay for.

Click here for further informaiton on how the changes to the French auto-entrepreneur scheme could affect your business