What is an Auto-Entrepreneur?
The scheme was introduced by minister Hervé Novelli under the 2008 law to modernise the economy, and came into force in 2009. It aims to encourage small-scale start-ups and entrepreneurship in France. Auto-entrepreneurs are not required to register with the Registre du Commerce et des Sociétés (Chamber of Commerce and Businesses) or the Repértoire des Métiers (Trade Directory). Registration can be done online, at a Centre de Formalités des Entreprises, at chambres de commerce, chambres des métiers, or URSAFF centres.
Auto-entrepreneurs pay tax and social contributions at a flat percentage rate of turnover (previously, many would-be entrepreneurs were deterred from setting up their own businesses because of high charges and legal obligations in France). Charges are only due where there is income: if turnover is zero, nothing is owed. Most auto-entrepreneurs are also exempt from VAT, as long as their income remains below a certain threshold.
Who Can Register as an Auto-Entrepreneur?
Anyone aged 18 or over who is not already trading as a business can register as an auto-entrepreneur, including students, retired people and employees looking to supplement their income, as long as they belong to an accepted category.
Micro-Entreprise Tax Regime
The tax advantages of the auto-entrepreneur system are available to those who do not charge (or claim) VAT; and who do not exceed the threshold for turnover for their category of business. These thresholds are as follows:
- €80,000 for businesses selling goods, articles, supplies, food (to take away or eat on the premises) and accommodation services.
- €32,000 for other activities.
- €32,000 for services that are taxable under BNC (bénéfices non commerciaux; this mainly applies to professions libérales.
Taxes and charges are calculated as percentages of turnover:
- Businesses selling goods, articles, supplies, food (to take away or eat on the premises) and accommodation services: 13% (12% in charges + 1% income tax)
- Other activities: 23% (21.3% in charges + 1.7% income tax)
- Services that are taxable under BNC: 20.5% (18.3% in charges + 2.2% income tax).
ACCRE: Financial Help for Auto-Entrepreneurs
ACCRE stands for aide aux demandeurs d’emploi créant ou reprenant une entreprise. Would-be auto-entrepreneurs who are unemployed or under 25, for example, may be eligible for a reduction in social charges during the early years of their micro-entreprise. Information can be obtained from the APCE agency.