8. French Business Banking, Accounting & Insurance

1. 8.1. Banking
   8.2. Accounting
   8.3. Insurance

8.2. Business Accounting in France - Centres de Gestion Agréés (CGA)

When starting a business the advice of a good French commercially orientated accountant is highly recommended, if only to get a proper understanding of your fiscal and social security options.

However, when it comes to getting professional help there are ‘accountants’ and there are ‘accountants’.

Some have a reputation to keep and their word is generally respected by the tax authority. Others may lack a degree of credibility and fail to convince.

One approach you might wish to consider in order to keep down the fees, is to do some of the basic record-keeping yourself. Preparing a monnthly spreadsheet analysis of expenses and revenues, which the accountant could use would be one approach. Discuss the issue with your accountant, and ask them what they want from you.

Be very cautious about engaging accountancy advice outside of France, if only because of difficulties concerning your legal right of redress in the event of professional negligence by the accountant.

Accountants with no legal status in France operate outside of the jurisdiction of the French legal and regulatory authorities.

As a small business, the accounting requirements of the statutory authorities are not severe, particularly if you do not establish a limited company.

As a sole trader it should be sufficient to maintain a daybook of receipts and expenditure, together with all the relevant bills and invoices.

A small business can opt for a tax regime called micro-entreprise under which there is no need to produce detailed accounts for the tax authorities – it is enough maintain a daybook of expenditure and receipts. When you make your tax declaration you simply state your turnover, and you will be given an automatic abatement before income tax is charged. There is no need to present the accounts of the business, although you will need to keep them available for possible inspection.

As the business grows (and particularly if you engage staff, or become a limited company, or liable for VAT) it may be necessary or preferable to change your tax regime, when there will almost definitely be a requirement for double entry bookkeeping and the need for an accountant.

A business start up can expect to pay around €1500 per year for basic accountancy support from a local firm. The support is likely to include preparation of the annual tax return.

The CGA will prepare your accounts at a reasonable cost, and provide you with business and accounting advice.

If you do use a CGA then you are granted some relief on your taxation liability.

Your social security contributions will be based on your actual profit, not the above multiple.

However, the use of a CGA is only available to those who pay tax under the regime reel. So it is not available if you opt for micro-entreprise tax status.

In addition, if your turnover does not exceed micro-entreprise turnover limits (even though you have not opted to be taxed as a micro), you also benefit from a deduction in income tax of €915 a year for the accounting costs that you will incur.

There is also strong evidence that if you affiliate to a CGA, you are less likely to be subject to an inspection or control by the tax authorities.

Do not assume from this that the CGAs are unofficial spies for the French tax authority. They are not, but that is not to say that the service offered by some is better than others. You have to do your research, ask the right questions, and make a considered choice.

In the first year of starting the business, you are permitted 5 months grace to affiliate to a CGA, permittting you to benefit from the concession for the whole year.

A business using a centre de gestion is obliged to accept a cheque payment system, a rule that many consider is honoured more in the breach than the act!

Whichever approach you take to accounting, you are required by law to retain all accounting records for 6 years.

If you do your own accounting, and it is computer based, then you are obliged to ensure that the archiving system maintains the authenticity and reliability of the records.