Increased minimum wage, launch of the EIRL, reduced payment delays for invoices, introduction of a new tax for auto entrepreneurs. Get up to speed with all the new laws which may impact of your French business in 2011.
Increased minimum wage
From 1st January 2011 the French minimum wage called SMIC has increased by 1.6% to 9€ per hour. The monthly gross salary for employees is 1,365€ (net salary 1,073€). As a reminder, employer’s social charges represent about 40% of the gross salary. For instance the social charges you would pay of a smic would come approximately to 546€.
Launch of the EIRL
Entreprise Individuelle à Responsabilité Limitée is a sole trader with limited liability. The EIRL enables entrepreneurs to split up their personal and professional asset. A legal document has to be drawn to confirm each asset “patrimoine professionnel” and “patrimoine personel”. In the event of financial difficulties or liquidation the personal asset will be protected from creditors. The aim of the EIRL is to protect entrepreneurs from personal bankrupcy. Although the legal structure is not a limited company, EIRL owners will have to publish their yearly accounts or “bilan” to the Greffe du Tribunal de Commerce. More on the EIRL soon.
Reduced payment delays on invoices
In order to improve businesses’ cash flow a law was voted in January 2009 to reduce the delays used to pay suppliers, called “delais de paiement” in French. Since 1st January 2011, suppliers will have to be paid within 45 days end-of-month (fin de mois) or within 60 calendar days. The starting point can either be the day the goods are delivered or the day the service is provided. Exemptions apply for some activities such as building trade, industrial tools or central heating installations, for which the delays will be steadily reduced, starting from 50 days end-of-month in 2011. Penalties can be charged when the delays are not met, although they may be tough to enforce.
New turnover threshold and new tax for auto entrepreneurs
As per last year, the auto-entrepreneur turnover has slightly increased in 2011, with a maximum of 32,600€ for services and 81,500€ for trade. All auto-entrepreneurs are exempt from Contribution Economique Territoriale (CET) for 3 years, but will be liable to a new tax called “Contribution à la Formation Professionnelle”. This tax will represent 0.3% of the turnover for artisan, 0.2% for intellectual or manual services and 0.1% for trade. Auto entrepreneurs with an income (not turnover) below 4 740€ in 2011 will be exempt from Contribution à la Formation Professionnelle.
DADS deadline to be completed by 31st January
If you have employees, you will be familiar with the Déclaration Annuelle des Données Sociales (DADS), i.e. yearly declaration of social information relating to employees: list of employees with their salary, retirement or redundancies occuring in 2010, etc. This declaration will have to be returned by 31st January for all businesses, against 28th February for last year.
New custom controls on import and export
New procedures apply prior to importing goods to France and the European Union. Companies have to make an electronic declaration prior to the arrival or departure of goods. This new approach is called “Déclaration Sommaire d’Entrée” (ENS) and applies to all goods imported into the territory with the exception of some goods in transits. For more information, visit the customs’ web site on Import/ Export Control System
These are the major changes taking place since the 1st January 2011. As always, I will keep you up-dated as and when new laws may impact your business. Make sure your register to my monthly newsletter not to miss any info. Go to the email catcher on my homepage.