This article explains changes that come into effect in 2019. 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
Most of the changes below will come into effect on 1st January 2019, although some will be a little later.
Turnover limits stay the same as in 2018:
€170,000 for sales and supply of lodgings (hotels, chambres d’hôtes (B&Bs), rural gîtes classed as furnished holiday lets, furnished holiday lets), with VAT registration obligatory over €82,800
€70,000 for supply of services classed as BIC and for freelance professionals classed as BNC with VAT registration obligatory over €33,200
Be aware that figures are net of VAT and calculated pro-rata for businesses that start during the year.
All micro-entreprises must now report their turnover online, however low the turnover.
Social Contribution Rates
|Cotisations sociales auto-entrepreneur par type d’activité en 2019|
|Activité principale||Cotisations sociales||Taux de cotisation pour la formation professionnelle (CFP)||Total|
|Vente de marchandises||12,80%||0,1%||12,9%|
|Prestation de services BIC (artisanale)||22%||0,3%||22,3%|
|Prestation de services BNC (commerciale)||22%||0,2%||22,2%|
|Cotisations sociales et fiscales en cas d’option pour le prélèvement de l’impôt en 2019|
|Activité principale||Cotisations sociales + CFP||Prélèvement libératoire de l’impôt sur le revenu||Total|
|Vente de marchandises||12,9%||1%||13,9%|
|Prestation de services BIC (artisanale)||22,3%||1,7%||24%|
|Prestation de services BNC (commerciale)||22,2%||2,2%||24,4%|
PAYE (prélèvement à la source)
This comes into force in January 2019 and will take the form of monthly or quarterly payments on account calculated by the tax authorities based on your last known turnover. You should already have been informed of the amounts to be paid when you filled in your tax return in 2018. To find out more see our guide to the new tax rules.
People starting their microentreprise have 3 options:
- Wait till September 2020 when they will do the return for their income in 2019, and then pay the tax due before 31st December 2020.
- Use the tax authorities’ simulator to start paying on account before doing your first return in September 2019.
- Opt for the “versement libératoire” and pay your income tax at the same time as your social contributions.
Whichever you choose you will have to pay all tax due by the end of 2020, so be careful to make sure you have enough money put by if choosing option 1.
Phased move to the CPAM for all ME
As reported last year, the change of governing body for sickness insurance from the RAM to the CPAM is being introduced gradually. By 2020 the changes will be in place and you will be attached to the CPAM for your health. In the meantime the SSI (Sécurité Sociale des Indépendants) is handling health protection for freelance workers.
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. For everyone else the following applies:
- Businesses started in 2018 – you will be looked after by the SSI in the same way as artisans and salespeople. You will be able to benefit from sick pay under certain conditions.
- Businesses started before 2018 – you will continue to be attached to the CIPAV, unless you ask to be moved to the SSI. This is not automatic and must be undertaken between 2019 and 2023. If you do move, you will be able to get sick pay.
From 2019, maternity leave for independent workers will be the same as for employees, allowing a much more generous 8 week minimum period (2 before the birth) and up to 16 weeks if desired.
Reduced social charges for new businesses
Anyone who starts a new business from 1st January 2019 can benefit from the “exoneration de début d’activité”. This allows you to benefit from an exemption from paying part of the social charges. It is on a sliding scale across the first 3 years of business. The only condition is that your income (turnover after abatement) must be less than €40,254 for the first year of activity. This figure corresponds to turnover net of VAT as follows:
- €139,738 for sales of products
- €81,048 for sales of services
- €61,400 for independents
The amount of discount depends on the amount of turnover and is reduced each year, up to 3 years. You then have to wait 3 years before reapplying.
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.
No more compulsory pre-business training
The Stage de Préparation à l’Installation (SPI) that everyone affiliated to the Chambre de Métiers had to do when starting a business has been made optional and is now available to be taken by distance learning if desired. The price has also been reduced to €194 from €250.
If your turnover does not exceed €5000 per year you do not have to run a separate bank account for your business.
The legal time frame for opening a separate account has also been extended to 2 years after the turnover has reached €5000.
Single point of registration
From 2021, a single point of registration will be put online for all forms of company. This will simplify life for those registering a business whatever the legal form or activity. This platform will forward on information to the relevant bodies.
In addition, the Répertoire des métiers and the Registre du commerce et des sociétés will be merged meaning a bit less red tape!
Entitlement to unemployment benefits
People who resign from employment to set up a company can now receive the AREP benefit while they are launching it, as long as they fulfill certain conditions. A full description is given here.
From January 2019 independent workers who meet the conditions can receive a new benefit called “allocation des travailleurs indépendants”. This will not be more than €800 for a maximum of 6 months and will only be paid if the company was put into liquidation or receivership and turned over around €10,000.