For several years now, the term “auto-entrepreneur” has no longer had any legal existence and has been replaced by the status of “micro-entrepreneur.”
Being a micro-entrepreneur allows you, when declaring your activity with URSSAF, to opt for the flat-rate income tax payment (versement libératoire de l’impôt sur le revenu).
In practice, the flat-rate payment is calculated on the basis of your declared turnover, to which a tax rate is applied depending on the nature of your activity:
- 1% for businesses engaged in the sale of goods, items, supplies and food products for takeaway or on-site consumption, as well as the provision of accommodation such as classified tourist accommodation and guest houses;
- 1.7% for businesses providing commercial or artisanal services and furnished rental activities;
- 2.2% for taxpayers earning non-commercial profits (BNC) from unregulated liberal professions.
⚠️ Please note: many micro-entrepreneurs are not eligible for this tax regime because the cumulative conditions set out below are not met:
- The reference tax income (“RTI”) of your tax household for the penultimate year (2023) must not exceed the upper limit of the second income tax bracket for 2024, i.e. €28,797 per family quotient share.
This threshold is increased by 50% per additional half-share or 25% per additional quarter-share. - Your turnover excluding VAT for the previous year must not exceed the thresholds applicable to the micro-enterprise regime (which vary depending on the nature of the activity);
- You must be subject to the micro-social regime.
What are the tax risks?
If you do not meet these conditions but have nevertheless opted for the flat-rate income tax payment, you will be taxed on the difference between:
- the amount of tax already paid through the flat-rate payment, and
- the amount of tax resulting from your turnover being taxed under the progressive income tax scale.
In addition, you will be liable for late payment interest at a rate of 0.20% per month (i.e. 2.40% per year), as well as a penalty of 10% or 40% of the amount of tax avoided.
Sources:
Article 151-0 of the French General Tax Code
BOI-BIC-DECLA-10-40-10
