The micro-entrepreneur status has been a resounding success since its creation, thanks to its many administrative, social and tax advantages.
To create your status, simply fill in an online form. A simple copy of your ID is required to activate all your benefits. You will then receive your SIRET number and your legal information by post within 3 to 6 weeks.
Throughout the life of your micro-business, administrative formalities are kept to a minimum. All you have to do is declare your monthly or quarterly sales your monthly or quarterly sales, pay your contributions and complete your income tax return.
When your business is dissolved, a simple declaration is all that's needed to make it disappear.
However, micro-entrepreneur status is not available to all businesses. A sales ceiling applies, and must be scrupulously respected, otherwise your micro-enterprise will be requalified as an EURL or EIRL. You will then lose all the advantages inherent in this status.
Let's take a look at the sales ceiling applicable to micro-entrepreneurs in 2024.
The micro-entrepreneur status is designed to enable independent entrepreneurs to start up their business under advantageous conditions, to encourage their business to grow.
This support measure cannot be applied to medium-sized companies, or those with greater resources. A ceiling is therefore imposed on companies with sales above a certain threshold, in order to concentrate support on those who need it most.
All micro-entrepreneurs are treated equally.
- For micro-entrepreneurs engaged in purchase/sale activities, this is set at €188,700.
- For those operating in the service sector, it is €77,700.
The micro-entrepreneur's reference tax income must not exceed €27,519 to qualify for the payment in full discharge of income tax.
Micro-entrepreneurs are totally exempt from basic VAT. In other words, they don't charge VAT, but they don't reclaim it.
- For craftsmen and self-employed professionals, any company with annual sales in excess of €36,800 is finally subject to VAT.
- For retailers and accommodation businesses, the threshold is set at €91,900.
If the threshold is exceeded during the course of the year, you are obliged to charge VAT from the date on which the threshold is exceeded. However, if your sales (excluding VAT) in any calendar year are below the exemption threshold, you can benefit from VAT exemption from January1 of the following year.
Micro-enterprise ceilings are expressed in terms of annual sales excluding taxes. They therefore represent the total sales of goods and services made by the micro-enterprise over an accounting period.
It's important to take into account your actual annual sales, excluding outstanding receivables. If you exceed the sales ceiling, you will initially benefit from a one-year tolerance period.
However, if your pre-tax sales exceed the threshold for two consecutive years, the transition will take effect on January1 of the following calendar year.
If you exceed the VAT exemption limit, there is no tolerance period. You are then obliged to invoice as soon as the amount is exceeded.
It is therefore essential to issue rectifying invoices for any invoices collected between the time of the overrun and the start of actual VAT invoicing.
Despite its apparent simplicity, the tax system for micro-entrepreneurs requires real attention. You need to have a firm grasp of all the rules that govern your day-to-day business.
Indeed, the changeover from micro-entrepreneur status to that of a traditional company requires major changes in legal, administrative and tax terms.
So make sure you anticipate this transition as smoothly as possible.
Written by our expert Paul LASBARRERES-CANDAU
December 19, 2019
