Wednesday, 15 July 2009

Self Employment in France - Auto Entrepreneur

2009 has become the year for anyone looking for self employment in France and the reason why is the introduction of the 'Auto Entrepreneur System' which allows individuals to register and start a business where instead of paying tax on an assumed income, which may or may not be realised, you only pay tax on actual earnings.

It was pretty clear under the old regime that working on the black market was a temptation many could not resist because of the uncertainty surrounding whether you would actually earn any money from a new enterprise and potentially having to pay tax on a business that didn't actually take off.

Not declaring your business and not paying tax is of course totally illegal and in my opinion not worth the risk so the introduction of this new system will be a godsend to many people, being self employed in France just got easier.

There are limitations on the new system, for instance your business must turn over less than €80,000 per year gross if you are selling products or providing catering and/or accommodation.

If you are providing a service, like website design or soft furnishings make up (but not supplying materials) then the turnover must be below €32,000 per year.

Tax can be declared and paid on a monthly or quarterly basis and the rate of tax is either 12% for those reselling products and 21.3% for those selling services (in simple terms). This is under the 'micro-social simplifie' system.

For the 'micro-fiscal simplify' system the percentage of turnover is 1% for those reselling products and 1.7% for those selling services.

So to cover your social and tax charges combined, resellers would pay a total of 13% and service providers would pay a total of 23%

You can apply to become an Auto Entrepreneur on line, the form is in French but is relatively straight forward to complete. I would only apply if you are sure that this is the best route for you, if you are not sure then it would be wise to seek the advice of an accountant before taking the plunge.

Both my wife and I live and work in the Languedoc Roussillon region of the South of France, my wife operates a Soft Furnishings Business and I operate a Website Design Business Either of us can be contacted via our websites and we both offer very affordable services in France with free, no obligation quotes.

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