Auto Entrepreneur = Micro Entrepreneur
Just to clarify... You might have heard about auto entrepreneur and micro entrepreneur? Well it is the same thing! This scheme was launched as Auto Entrepreneur in 2009 and was renamed Micro Entrepreneur in 2016.
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Turnover thresholds for micro entrepreneurs increased in 2020, with a maximum turnover of 72,500 euros for services and 176,200 euros for trade. Be careful however as TVA will have to be applied above 34,400 euros for services and 85,800 for trade. This will mean at this stage requesting a TVA number from Impots, so it is best to plan this move.
Social charges are based on a fixed percentage of the auto-entrepreneur’s turnover. 22% for services (consultants, programming, teaching, bed and breakfast) and 12.8% for trade (gites, ecommerce, shops) . Expenses cannot be claimed for, but have to be recorded. Income taxes can be paid up-front, by paying an extra fixed percentage of their turnover. This option is called impôt libératoire (2.2% for profession liberale and 1% for trade).
Social charges exoneration - changes in 2021
I'm afraid that ACRE was reviewed and is now limited to people registered with the unemployment agency Pole Emploi, benefiting from the minimum revenu of reinsertion RSA or being under 30 years old. ACRE is not automatic and has to be requested on registering your business. The exoneration is also reduced to 50% of the normal rate and be limited to a year: 11% for profession liberale and 6.4% for trade.
Auto-entrepreneurs / micro entrepreneurs are liable to other taxes, including Contribution Foncière des Entreprises (CFE) and Contribution à la Formation Professionnelle (CFP 0.2% for profession liberale and 0.1% % for trade). Auto-entrepreneurs are currently exempt of CFE, but talks are currently under way and it may end up being charged as an extra set percentage turnover.
The auto-entrepreneur, now officially called micro-entrepreneur, is a sole trader or one-person business, registered under the entrepreneur’s name. As such, there is no distinction between the owner and the business, meaning the entrepreneur is liable for the debts generated by the business.
As an auto-entrepreneur / micro-entrepreneur you can not claim any expenses the business incurs.
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