This article explains what has changed in 2018. For an explanation of how to become a micro-entreprise (auto-entrepreneur) and why see our guide to setting up as a micro/auto-entrepreneur
There have been some significant changes to the system for micro-entreprise in 2018.
The turnover limits have been raised significantly with effect from 1st Jan 2018. Turnover from 2017 onwards will be taken into account, anyone whose turnover does not exceed the following limits for the two preceding years can be a micro-entreprise:
€170,000 for sales and supply of lodgings (hotels, chambres d’hôtes (B&Bs), rural gîtes classed as furnished holiday lets, furnished holiday lets)
€70,000 for supply of services classed as BIC and for freelance professionals classed as BNC.
No longer exempt from VAT registration
Previously the turnover limits were linked to the limits for VAT registration. Now they are separate and anybody who has a turnover that exceeds the VAT limit, needs to register for VAT. The turnover limits that apply depend on your business. You can check them on the tax office site. But in the main if you are in the sales category for turnover, the VAT limit is €82,800, and for services it is €33,200. You register by contacting your local corporation tax officer.
2 years turnover before de-registration
You can now be over the turnover limit for 2 years before you will be automatically moved into the standard simplified tax system for small businesses. This will happen in the third year.
Changes to the rates for social charges
The rates may change slightly in 2018 to take into account the reductions to the charges for sickness and family benefits (allocations familiales). If they do the rates for the ACCRE will also be adjusted. The announcement has yet to be made at the time of writing.
Freelance businesses affiliated to the CIPAV
There will be a gradual change for businesses that are currently affiliated to the CIPAV for their retirement contributions. In the future, only those that are professionals in the strictest sense will remain affiliated, that is: architects, surveyors, engineering consultants, psychotherapists, psychologists, occupational therapists, osteopaths, artists coming under the Agessa and ski instructors.
Any other micro-entrepreneurs who are affiliated to the CIPAV need to choose either to stay with the CIPAV or to ask to be affiliated to the retirement insurance for independent workers (assurance vieillesse des travailleurs indépendants).
End of the RSI
The RSI has been abolished, or rather has changed name to become the “Sécurité sociale indépendants”.
From January 2018 freelance workers/sole traders will gradually be moved over to the “régime général”, standard system, for their social security benefits to give them the same standard of cover as employees, whilst still taking their different circumstances into account.
The government has announced a 2 year transition period during which the SSI (former RSI offices) will handle freelancers. The same organisations (eg RAM, Harmonie Mutuelle, ADREA, AGIR, EOVI Mutuelle etc.) will carry on looking after sickness and maternity benefits.
In 2019 people setting up a business who were employees and are already registered with the CPAM will be handled by the CPAM.
In 2020 all freelancers will be handled by the CPAM
The different benefits will be handled by these organisations:
- Health – CPAM
- Basic pension – CARSAT
- Social charge payments – URSSAF
- In the overseas territories (DOM) everything will be handled by CGSS
Existing rights through the RSI to reimbursement for illness, pension, invalidity benefits etc will all still continue to be paid.
No more CFE from 2019 for very small businesses
If you turnover less than €5000 you will no longer have to pay CFE (business rates) from 2019. The CFE is based on your previous year’s turnover, so your turnover from 2018 will be what your tax for 2019 is calculated on.