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Tax Breaks for Business Centre Affiliation

Tax breaks for affiliation to an accredited small business accounting centre that were to be abolished in 2016 have been reinstated.

Small business owners in France using the régime réel basis of taxation (actual costs and revenues) are able to adhere to a network of accredited business centres, called Centres de Gestion Agréé (CGA).

The role of these centres* is to provide, for a modest charge, accounting, economic, training, business and tax support.

The range of services offered by the CGAs will depend on the role they have determined for themselves. Most will review your practices and offer tax, accounting and business advice as well as book-keeping.

As they specialise in business accounting the centres can be a useful resource for business owners.

It is reputedly the case that CGA members are less likely to be subject to an investigation by the tax authority.

The average cost of affiliation to a centre is around €200 a year, although it can vary from around €50 to €900, depending on the services provided by the centre.

Certain tax breaks are available to those who use these centres.

Those who operate as a micro-entrepreneur are also able to affiliate, but obtain no tax advantage.

Perhaps the most significant tax benefit is that adherents using the régime réel are exempt from the otherwise automatic increase of 25% in profit that is applied by the tax authority to other small business owners for the purposes of calculating liability to income tax.

Adherents have also benefited from a reduction in income tax, worth up to €915 a year, as well as the tax deductibility of the salary of the spouse of the business owner.

However, last year the tax break was abolished entirely and the deductibility of the salary of a spouse was limited to €13,800, operative from 1st January 2016.

These changes were introduced against the wishes of the government, who have now been able to broadly reverse them in the draft finance bill for 2016, making the changes introduced in 2015 inoperable.

Accordingly, in 2016 an income tax deduction will apply, up to two-thirds of accounting and CGA affiliation costs, capped at a maximum of €915, as well as the tax deductibility of the salary of the spouse, up to €17,500.

The tax reduction for accounting costs does, however, mean that the actual costs are not deductible.

You can more information about your local CGA at Fédération des Centres de Gestion Agréés (FCGA), or at AGAFRANCE for the professions libérales.

*Some accountancy firms also have CGA accreditation.

This article was featured in our Newsletter dated 03/05/2016

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