Learning to manage your French business can be confusing as you are bombarded with many French words, not to mention acronyms! In this article, I have listed a few French words which you need to know about, to better understand how your business works. Bonne lecture!
Le Chiffre d’Affaires
This is how much you have sold over the last month or year. It refers to your turnover. It can also be called “les ventes de marchandises” for physical goods or items sold or “les prestations des services” for services.
La Taxe sur la Valeur Ajoutée (TVA)
Taxe sur la Valeur Ajoutée (VAT in English) is a small tax collected by the French government for businesses going over a turnover of €34,400 for services and over €85,800 for trade (buy and resale, gites, restaurants). If you are below these levels of turnover, you will not be TVA registered and you will have to add the mention “TVA non-applicable - article 293 B du CGI” on your invoices. There are three rates of TVA: standard rate of 20% for services and goods, reduced rate of 10% for unprocessed agricultural products, firewood, housing improvement works and 5.5% for food products and books.
Le Regime Social
The Regime Social relates to the social charges that you will be paying to URSSAF. The social charges are going towards your health cover, a training fund, your pension and the generic French system. The social charges rate also called regime will vary according to the type of business you have. For instance régime micro social for micro entrepreneur, régime réel or régime normal for entreprise individuelle or incorporated businesses (EURL/SARL, SAS/SASU).
Le regime Fiscal
The Régime Fiscal summarises your business set up with the tax office (i.e. TVA registered or not) and your income tax or incorporation tax. As a sole trader (micro entrepreneur or entreprise individuelle), you are liable to personal income tax on your business income. If you have an incorporated business (EURL/SARL, SAS/SASU), you may be liable to income tax or incorporation tax on your profits. It is up to you to make this decision. I recommend speaking to an accountant to make this choice based on your personal circumstances (i.e. level of income, family situation, other sources of income).
La couverture santé
As an entrepreneur your health cover will be managed by Caisse Primaire d’Assurance Maladie (CPAM) also known as Sécurité Sociale. Your business registration will generate the creation of the French social security number and your carte vitale. Be aware that this process is lengthy and may take 4 to 6 months. In the meantime, you are covered by a temporary French social security number, but this means paying upfront for your health expenses, before being reimbursed by CPAM later on.