Registering a micro-enterprise is one of the simplest steps in the business world: it can be done in just a few minutes directly online on the URSSAF website, or at your local Centre de Formalités des Entreprises, by filling in the P0 CMB micro-entrepreneur form for craftsmen and tradesmen, or the P0 PL micro-entrepreneur form for all other types of business.
Running a micro-business is relatively straightforward, and the conditions are particularly advantageous.
Since 2016, we no longer distinguish between auto-entrepreneurs and micro-entrepreneurs: they're the same thing, brought together under the heading "micro-entrepreneur".
Since the recent reforms of 2016, the micro-entrepreneur and micro-enterprise statuses are broadly the same
A micro-enterprise is a special tax regime with significant advantages, while a micro-entrepreneur is a self-employed person who must be registered and benefits from the simplified microsocial regime.
Recent reforms since 2015 have tended to harmonize statuses and facilitate access to micro-entrepreneur status.
Before the Sapin 2 law, only sole traders or those who have opted for the EIRL could benefit from the micro-entreprise regime.
Since the law of December 11, 2016 (Sapin 2 law), EURL or SARL unipersonnelle avec un gérant associé unique personne physique peuvent bénéficier de ce régime micro-entreprise.
Micro-entreprise is first and foremost a flat-rate tax system similar to a sole proprietorship and not a legal status.
To obtain this status :
- It may not have more than 10 employees ;
- It must not generate more than €170,000 in sales for trading and accommodation supply activities, and €70,000 in sales for services and the liberal professions.
Certain types of status are not eligible for the micro-enterprise scheme, such as :
- Companies ;
- Non-profit organizations ;
- Corporate bodies.
Certain activities are excluded from this status:
- Companies selling and buying real estate;
- The leasing of equipment or consumer durables, except where this is incidental;
- Intervention in financial markets.
The tax rate applied to the profits of a micro-business is a flat rate , depending on the type of activity carried out.
Those engaged in the purchase and sale of goods are taxed on the progressive income tax scale after a 71% allowance , giving a tax rate of 29%. The same applies to seasonal rental micro-businesses.
Micro-businesses engaged in traditional furnished rental activities are taxed at the progressive income tax rate after a 50% allowance, i.e. a tax rate of 50%.
Those providing services are subject to the same rules.
Professional activities are taxed on the progressive income tax scale after a 34% allowance, giving a total tax rate of 66% on sales.
Micro-entrepreneurs can also opt for the prélèvement libératoire de l'impôt sur le revenu (withholding tax on income), which merges the payment of income tax and social security contributions into a single payment.
This option is available subject to certain income conditions, and the request must be made directly to URSSAF.
Companies with micro-enterprise status are automatically exempt from VAT, so they don't have to charge it to their customers.
In return, they cannot use the VAT recovery mechanism.
Micro-businesses are also liable for the Cotisation Foncière des Entreprises (CFE), except during their first year of operation.
The accounting formalities to be complied with are very straightforward, compared with conventional companies. All they have to do is keep a daybook summarizing all professional income.
Those engaged in the sale of goods or the provision of accommodation must also keep a record of all their purchases.
Like all companies, they must keep all invoices issued or received, as well as all expense receipts .
The micro-enterprise regime is being taken in stride by President Emmanuel Macron, who wants to enhance the status of self-employed workers in the coming years. The sales ceilings have already been doubled as of January1, 2018.
The abolition of the Régime Social des Indépendants (RSI), replaced by the Sécurité Sociale des Indépendants , will be phased out by 2020, in order to offer the self-employed the same social protection conditions as employees and encourage the emergence of this status.
The CFE will be abolished for companies with annual sales of less than €5,000.
Written by our expert Paul LASBARRERES-CANDAU
February 28, 2018
