Artisan micro-entrepreneur turnover limits in France explained
To follow up on our previous discussion regarding turnover limits, I had a meeting with an advisor at the Chambre de Metiers in the Tarn department today. He agreed that there is a great deal of conflicting, ambiguous and incorrect information on the internet and gave me a document named Les Categories de Chifre D’affaires which states:
Prestation de services - Definition - Facturation d’heures de main d’oeuvre - Facturation de services a la personne ou aux professionnels ne mettant pas en oeuvre de matieres premieres. Ventes de marchandises - Definition - Vente des marchandises, objets, fournitures et denrees a emporter ou a consumer sur place ou fourniture du lodgement (hebergement).
He then confirmed that under my registration as a joiner, I can produce furniture, kitchens, windows etc. from the raw materials and the sale of these products comes under the classification ventes de marchandises with a turnover limit for 2016 of 82,200 euros. The charge for the installation of kitchens, windows etc. which I manufacture should be shown separately on the invoice as prestation de services which has the 2016 turnover limit of 32,900 euros within the overall turnover limit of 82,200 euros for a micro-entrepreneur.
For my work in the construction sector i.e. roofing, renovation etc., the labour is invoiced as prestations de services with the 32,900 euros limit and materials are shown separately on the invoice as ventes de marchandises with the 82,200 euros limit.
There was some considerable discussion regarding carpentry work, as I buy for example, green oak, take it to site, cut is, shape it, make trusses etc. He advised me that the total charge for this work, including the labour element should be treated as ventes de marchandises with a turnover limit of 82,200 euros, as I am taking raw materials and transforming them into a roof structure. I was not 100% happy with this as we discussed the possibility of future control inspections and that I would have to justify the transformation of the raw material into a finished product and I feel that this point is open to different interpretation and could therefore give me potential problems in the future. So for this work I intend to invoice the materials as ventes de marchandises and the labour as prestations de services.
For all of the different types of work I am registered to do, there is an annual combined limit of 82,200 euros and within that limit is the 32,900 euros annual limit for prestations de services, therefore in 2016 I could invoice labour up to 32,900 euros plus up to 49,300 euros materials and joinery products giving the overall total of 82,200 euros or a lower amount of labour and a higher amount of product sales within the 82,200 euros limit.
I asked if there were any other documents I could have to further confirm the above and he explained to me that it was agreed between the tax authorities and the accountants in the department that this was the case and that this was the information given to new micro-entrepreneurs on the course that they have to attend when registering with the chambre de metiers.
So, going back to my initial question regarding the markup of materials I sell, it seems that if I do a roofing job for say 20,000 euros and the cost price of materials is say 8,000 euros, I can put a reasonable mark up on the sale of the materials to cover cotisations I will have to pay on these sales (1,064 euros if my calculations are correct) and also to make a profit. So for example, if I sell the materials at 10,000 euros and then charge labour at 10,000 euros the overall cost to the client is still 20,000 euros but my turnover under prestations de services for this job is 10,000 euros instead of 12,000 euros and so I pay a little less cotisations overall on the job and can carry out more work in the year under the prestations de services 32,900 euros limit.
I understand the point that many micro-entrepreneurs get their clients to buy the materials as it is cheaper (1,064 euros cheaper as in my example above), but many of my clients do not want the hassle and prefer me to deal with everything. Also considering that it seems many registered artisans are not happy with the micro-entrepreneur scheme and feel it is unfair competition I think that operating on a more professional basis can only help the way micro-entrepreneurs are regarded. In addition, I think that the sale of materials could also be helpful to some micro-entrepreneurs as it may put their turnover above the thresholds required to qualify for pension entitlement in that year.
Thank you for your help