A few changes were voted as part of the Loi de Finance 2020. Here are the key changes that will impact new or existing auto entrepreneurs. A quick reminder that auto entrepreneur and micro entrepreneur are the same thing.
Auto entrepreneur turnover threshold in 2020
Auto entrepreneurs’ turnover threshold has been increased for the next three years. New thresholds from 1st Jan 2020 are as follows:
- Trade, ecommerce, gites 176,200€, instead of 170,000€,
- Services - professions liberales and artisans 72,500€ instead of 70,000€.
The turnover threshold is based on a calendar year and therefore restarts on 1st January the following year. Bear in mind that there is a pro-rata rule for your first year in business, meaning that if you start halfway through the year, your maximum turnover is also halved.
Auto entrepreneur TVA threshold in 2020
The increase in turnover threshold has a direct impact on the TVA threshold, which has also been increased:
- Trade, ecommerce, gites TVA threshold of 85,500€,
- Services - professions liberales and artisans, TVA threshold of 34,400€.
This threshold is for your first year in business. If you are at least in your second year in business, these thresholds are slightly higher, with 94,300€ for trade and 36,500€ for services.
If you go over these thresholds, you will have to request a TVA number from your tax office - Service Impots Entreprises (SIE). It can take a good three weeks to get your TVA number, so it is best to plan this move ahead. Remember that all invoices issued for the month that you go over the threshold will be liable to TVA.
Turnover declarations have to be done online
URSSAF, the body collecting your social charges has been pushing for this for a while. All auto entrepreneurs have to make your turnover declaration online on https://www.autoentrepreneur.urssaf.fr/ or with the app Autoentrepreneur.urssaf.
The good news is that URSSAF mentioned that sometimes this year, the creation of this online account should be done automatically, as part of the affiliation process to URSSAF. This will simplify things for many people, as for now new auto-entrepreneurs often wait for a long time for their permanent French social security number, enabling them to create this online account.
For now, as this hasn’t been implemented yet, you will have to create your online account on your own. If you need help with this, have a look at my online training “How to manage your micro entrepreneur set up paperwork”. There is a whole section dedicated to creating your online account, showing you round this site, as well as showing you how to complete your first turnover declaration online and by paper.
Auto entrepreneur social charges & income tax in 2020
Social charges and income tax rates have not changed in 2020. These fixed rates are based on your turnover, i.e. sales cashed in over the month or quarter. The income tax at source is an option, you can also decide to declare and pay your income tax the following year, as part of your French income tax form.
- Trade, ecommerce, gites - 12.8% for social charges + 1% for income tax at source called impot libéraoire.
- Services - 22% for social charges + 2.2% for income tax.
Two small taxes are also based on your turnover and going towards a training fund - Contribution à la Formation Professionnelle (CFP) and the second one called Taxe pour Frais de Chambre (TFC) going towards Chambre de Commerce or Chambre de Metiers for trading activities and artisans.
- Trade - CFP 0.1% + TFC 0.015%
- Services artisans - CFP 0.3% + TFC 0.48%
- Services profession liberale - CFP 0.2%
Penalty fee for late turnover declaration in 2020
You have to declare your turnover every month or quarter, even if you have not made any sale. In which case, you would declare 0€. The penalty fee for late payment in 2020 is 52€ for any missing turnover declaration, as well as an increase of 5% of your declared social charges for late payment.
Social charges exoneration ACRE rates reduced in 2020
As mentioned in a previous blog post, the social charges exoneration ACRE has been seriously restricted and the rates reduced. Read my blog entry on ACRE in 2020.
ACRE rates for new auto entrepreneurs in 2020 are:
- A reduction of 50% for your first three quarters called trimestres in business
- Trade, ecommerce, gites - 6.4% instead of 12.8%
- Services - 11% instead of 22%
Health cover with CPAM
All auto entrepreneurs have moved to Caisse Primaire d’Assurance Maladie (CPAM), also called Assurance Maladie or Securite Sociale. This should facilitate your health cover set up, as it will enable you to go to your local CPAM office to chase your cover (best to book an appointment first). Read my blog entry on the switch to CPAM.
Maternity cover similar to employees’
This is another good news, as maternity leave for auto entrepreneurs is now similar to employees’. CPAM will manage this for you and it means:
- Maternity leave of 16 weeks.
- Possibility to start working again progressively (check for details with CPAM).
- A daily indemnity of 54€ per day for auto entrepreneur with a yearly income of at least 3,919€.
Get more information on the auto entrepreneur scheme
I am compiling a more detailed auto-entrepreneur overview, with extra information on income tax, pension, unemployment benefits and tables summarising taxes. This PDF document will be released in March. Email me if you wish to receive a copy when it is ready.
You are ready to register your auto entrepreneur? Check my auto entrepreneur registration services, which includes affiliation to URSSAF, Impots, CPAM, INSEE and/or Registre du Commerce based on your activity, as well as a two months email follow up.