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Business in France

Tougher Rules for Micro-Entrepreneurs

Wednesday 05 February 2014

Certain auto-entrepreneur contribution rates have increased for 2014, and the exemption from business rates has been abolished.

As the sun went down on 2013, a surprise increase in the cotisation rates (social security contribution) for some auto-entrepreneurs was announced by the French government.

Most affected are the professions libérales affiliated to the Caisse Nationale d'Assurance Vieillesse des Professions Libérales (CIPAV), whose rates increases by two percentage points from 21.3% to 23.3%, and due to rise again in 2015 to 25.2%.

The rate for those whose activity is primarily the purchase and resale of goods (ventes des marchandises), as well as restaurants, hotels and chambres d'hotes, also increases from 14% to 14.1%.

This means the social security rate for the four auto-entrepreneur business sector groups is as follows:


Activity
2013
2014
BIC Commercial
14%
14.1%
BIC Services
24.6%
24.6%
Professional RSI
24.6%
24.6%
Professional CIPAV
21.3%
23.3%

Since 2011, in addition to the basic social security contribution, auto-entrepreneurs also pay a small fixed percentage professional training levy, called la contribution de formation professionnelle.

These rates are shown below, together with the total percentage contribution payable in the micro-social regime. There are two rates for BIC Services as artisans have a training levy of 0.3%.

Activity
Levy
Total Rate
BIC Commercial
0.2%
14.2%
BIC Services
0.2%/0.3%
24.8%/24.9%
Professsional RSI
0.2%
24.8%
Professional CIPAV
0.2%
23.5%

Business Rates

To the increase in social security contributions needs to be added the end to the exemption from business rates (Cotisation Foncière des Entreprises - CFE).

Until now auto-entrepreneurs were exempt from business rates for the first year and subsequent two years following the creation of their business. That has now been terminated and so now they become liable from year 1.

The government has put some transitional arrangements in place, so that for those auto-entrepreneurs who started their business in 2000/2011 will be liable for the first time in 2014; those who started their business in 2012/2013 will benefit from the exemption in 2014, but will become liable in 2015.

Business rates are payable on the basis of rates bands, depending on the level of turnover. Although the amount payable is determined by each local authority the government have set a cap on the amount that can be charged within each rate band. For those with a turnover less than €10,000 it is capped at €500 pa, although there is a minimum contribution of €210 pa (€203 in 2014).

Those who work from home will be liable for the minimum contribution, and will no longer taxed on the basis of a proportion of the value of their home.

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