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Self-Employed French Tax and Social Security Declarations

Tuesday 09 March 2021

The system of tax and social security declarations for many small business owners is being streamlined this year.

Self-employed business owners who use the régime réel system of income tax are required to submit to the authorities each year three separate tax and social security declarations.

They returns are:

  • Déclaration des Résultats: the profit and loss statement and the balance sheet of the business for the year, made to the tax authority;
  • Déclaration de revenus: the standard income tax declaration which must be made by all households in France, and which will include all other income;
  • Déclaration sociale des indépendants (DSI): a declaration submitted to URSSAF, the social security contribution collections agency, from which is calculated the definitive level of contributions for the year.

Commencing this year, for 2020 income, the DSI has been abolished and the declarations for professional and household income have been merged.

In short, one online declaration for both income tax and social security contributions.

Géraud Nayral, from Cabinet Budiz, a multi-lingual tax accountant who provides a small business service states: "We await details of the new arrangements from the authorities but this is a significant change, which will come as a relief to business owners."

There will now be specific provision on a revised income tax return for business owners to declare their professional income.

The figures will be sent by the tax authority to URSSAF, who will then calculate the final level of social security contributions payable, with a demand sent to the owner for any underpayment or a notification of over-payment.

Those who run their business as a micro-entreprise are not affected by this change; they will continue to submit their periodic declaration of turnover to URSSAF, as well as their annual household income tax return to the 'Impôts'.

Also not affected are agricultural businesses and artists and authors.

This month, all those business owners who will be affected by the measure will receive a letter from the tax authority about the new arrangements.

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