2013 budget includes the destruction of the auto-entrepreneur scheme

Employed & Self Employed Auto/Micro-Entrepreneurs
1

While reading the news today, I came across a frightening piece of news: the destruction of the auto-entrepreneur scheme is included in the government's 2013 budget proposal.


The scheme will not be directlhy destroyed, but auto-entrepreneurs will have to pay the same social charges as a normal entrepreneur individuel.


As it can be seen on selon http://www.rsi.fr/cotisations/artisans-commercants/cotisations-minimales.html, the minimum annual contributions is €1583 for a commerçant or artisan. The pension contributions for the liberal professions (e.g. translators) are slightly different.


In addition to these minimum contributions, the CFE tax, formerly known as taxe professionnelle, has a minimum amount beween €200 and €2000 per year as decided by each commune.


Many auto-entrepreneur businesses will no longer be able to survive under these conditions. Most auto-entrepreneurs earn less than the minimum salary SMIC.


Sylvia Pinel, Ministre de l’Artisanat et du Commerce, had promised a wide consultation and ordered reports. The PM Ayrault has, by programming the destruction into the 2013 budget, cut all social dialogue with those concerned out and presented a fait accompli, except that the budget is yet to be voted.


If you are concerned as an auto-entrepreneur, first of all sign the petition on


http://www.federation-auto-entrepreneur.fr/petition.php



Whatever you can do to contact MPs, the press, or anyone else who might do anything, can only help, but let us have no illusions. Hollande hates the rich, and he clearly also hates the self-employed, whether or not they live below the poverty limit. Being self-employed in France is seen as a provocation by these socialists who have not evolved the last 100 years or more. It makes you an evil capitalist in their eyes. They prefer to see you unemployed rather than self-employed.


There will be 6000 civil servants more in 2013, an increase for the first time since 2003. There is no money for this, and at the same time the government plan to destroy more than 1 million auto-entrepreneurs. France is accelerating into a concrete wall. What they do is totally insane.


If you are an auto-entrepreneur, how would you react to this budget if voted through? Will you accept to pay the standard social charges that are calculated differently for nearly 10 different charges, based on your income two years ago, then recalculated when the actual income is known by the RSI? That system is totally chaotic and obscure. Will you move your activity abroad? Will you shut down your activity?


Don't forget that the CFE tax due in December is due if you are in activity on the 1st January that year. The year of creation and the two following years, you are exonerated. So if you declared yourself auto-entrepreneur in 2010, 2012 is the last year you don't pay the CFE. If you still exist as self-employed on 1st January 2013, you will be billed in December 2013. So 31 December is the last day to shut down such an activity to avoid the CFE 2013.


Hollande and his comrades seem determined to make France completelhy unattractive for business. I am considering my options and will certainly not accept a return to the horrible standard scheme, so if that is the only option for staying in business, I will shut down. And I am looking at an emigration to Romania or Bulgaria where you can buy a 3-bedroom house cash for €30,000 and pay 16% or 10% tax respectively. There is still growth in these countries, contrary to the old western Europe, and their public debts are very low.


France is going to the dogs. As the rats, I'll be leaving the sinking ship. Rats are not completely stupid. More clever than Hollande and his comrades in any case.


Articles about the planned destruction:


http://www.latribune.fr/actualites/economie/france/20120928trib000721920/budget-2013-le-statut-d-auto-entrepreneur-enterre.html


http://fr.news.yahoo.com/les-auto-entrepreneurs-menac%C3%A9s-par-le-budget-2013-194644752.html


http://www.rmc.fr/editorial/304374/les-auto-entrepreneurs-menaces-par-le-budget-2013/


http://www.federation-auto-entrepreneur.fr/auto-entrepreneur/actualite/2012/09/28/actualite-alerte-le-budget-2013-casse-le-regime-de-lauto-entrepreneur.html

2

Personally, if I went down the AE route , what I would do is order the materials from my usual trade outlet and then get a cheque from the customer at the end of the month (paid directly to the wholesaler) so the larger contingent of the materials don't bump up my turnover. The downside of this is that you lose the discount that you get from the wholesaler .

To be honest , some of the Brico sheds sell exactly the same branded wire and legrand items far cheaper than the wholesalers sometimes. I can't see how the insurance could be voided, as long as the goods used are NF , and /or CE rated for some items, this is all that is required by either the Consuel or an "expert" in the event of a claim.

I can't see how you could keep under the 32,600 euros threshold supplying electrical materials, and make a living. The electrical trade is one of the few of the trades that materials costs are often a much larger portion of the job than labour costs. You would need to "turnover" at least 50k IMHO :)

It makes for interesting discussion Veronique ....

3

Thanks for the informative replies .

Veronique, your reply has made me think. Changing to the AE status would completely change the way I have been working up until now. Most AE's I know get the customer to buy the majority of materials as there is no way you want to be buying goods yourself of a high value as they would count as turnover. As some electrical equipment is quite technical and expensive, this would be impractical and what about last minute purchases or unforseen items that you have to buy ? Most of my clients are expats living in the Uk with 2nd homes here, so not always easy to procure funds quickly. I 'm not sure if I could work like that. My business's principal activity is electricity/plomberie but we are registered for several other trades too , so I can forsee the AE system being a bit of a headache. What IS appealing about it though, is the "Pay as you go aspect" , no accountancy fees and no RSI monthly costs !!! Oh what to do ??

@ Tracy - Shame you lost your reply but thanks for your input and the link to the AE scheme; I havn't had a chance to find the relevant information yet but will take a look later on.

Also I need to find out what the difference is between réelle and simplifié . One thing I did do, when I became a single dad and money got tight, was to change my trading status to the new statute of E.I.R.L , (Entreprise Individuel, Responsabilité Limité) a bit like an EURL or SARL but for one man bands - something I would recommend everyone to do to protect your personal assets and home.

I think you are probably right that AE is not necessarily a cheaper way of running a business, but sometimes when I look at my friend who is an AE and doesn't pay RSI or accountancy fees , I think it IS !

4

Paul, something went wrong there - I wrote a long reply which has disappeared. Start a new discussion as this one has been done to death and I 'll try and remember what I wrote and post later - however I have to get on with my work now!

Je suis déjà artisan ou commerçant. Est-ce que je peux bénéficier du régime auto-entrepreneur ?

Oui. Si vous êtes au régime fiscal de la micro entreprise, vous pouvez opter pour le régime micro-social simplifié et éventuellement pour le versement libératoire de l'impôt sur le revenu avant le 31 décembre 2012 pour une application à partir du 1er janvier 2013.
Here is part of the reply, still on my paste button!
5

Hi Paul, there is a minimum period that you have to wait before you become AE after having a business in the same trade, not sure what it is but check out www.lautoentrepreneur.fr which is very comprehensive.

I am in the throes of changing from AE to EI but the accountant I am currently dealing with has advised me that I am to declare under the regime 'simplifie' not 'reel' as reel is more complicated and more expensive. So see if it possible to change to 'simplifie'.

With regards to AE, AE is not a cheaper way of running a business, it is a simplified way of running a business

6

Hi , I have just read every post on this thread as I have a dillemma.

I have been on the régime réel as an artisan (electricien /plombier) since 2001 paying the 45% or thereabouts to the government. I've employed people , ( never again after employing a roofer for 9 years - that's another story !) and tried to expand but the charges were horrendous, so I went back as a one man band.

Due to my seperation and divorce early 2011, and then having been left to bring up my two daughters, it became difficult to do everything and run the business, so consequently I made a loss in 2011 and expect my 2012 figures (when I see my accountant on wednesday) to be not much better .

Depsite that loss, I am still having to find 165 euros a month (minimum RSI contribution), plus my accountants fees of 200 euros a month, plus all the other expenses that I would have no matter what business regime I was under.

My friend, a Menuisier who got into difficulty with RSI ( hardly suprising ) keeps telling me to become AE and thinks I am bonkers trying to stay afloat and paying all this money on hardly no income. The only thing that has kept me going financially is the RSA , and payments from CAF due to my situation.

So my dilemma is this . I have my annual meeting on Wednesday with my accountant . Do I tell him that I want to close down and start up as AE ? Or would I be better to stay as I am with some of the "benefits" ( claiming back TVA, deductible expenses , etc etc) . I just can't seem to decide what to do!! Is there a "halfway" stage - (micro) that would be better for me ?

I am told that there is a minimum period if I close down under my existing régime to start up again as an electrician - does anyone know more about this ? If so maybe I'd start up as Odd jobs or something and then wait until that period has passed, close down and re -register ??

I really can't decide what to do , so any comments would be welcome, I see most of the people who have commented on this thread are in the opposite situation - ie: currently on AE and may change to micro or régime réelle .

7

But what are the alternatives? I mean, with AE you have low cotisations; what is a good alternative to AE? As I read it the other one person enterprises are something like 45 % cotisations; do these come with other perks? Like deductions of this and that etc.?

Are their any good alternatives? better alternatives?

8

We've just received our CFE's and I am so relieved, mine is 191€ (prof liberale) and my husbands' is 148€ (artisan). Just though I would post amounts as we were expecting amounts such as 600€ so very happy.

9

Both of us too, we hardly noticed any difference worth mentioning.

10

Well I have just had mine and it hasn't increased by much so fingers crossed for the rest of you. :)

11

Just read this article on whether it is better to be a-e or microentreprise. I read your link about the cfe, I became a-e this year and I don't know how much the tax is here.

http://www.capital.fr/carriere-management/actualites/le-statut-d-auto-entrepreneur-sera-t-il-toujours-attractif-en-2013-786102#xtor=EPR-226

12

I'm feeling a bit anxious about all this, as is the norm when France does anything tax or money related!

How worried should I be?

I registered as AE in 2011, presations de service/prof liberale, so in theory I 'benefit' from exonération for 3yrs, 2011, 2012 and 2013.


On the regime micro, paying just the tax to the URSSAF / déclaration de recettes.


Meaning that to avoid these changes I need to quit this system by the end of December 2013?


Is my tax rate going to increase from January next year too?

I had the choice of this or a CDD with my main contact, but chose this as able to earn more (certainly for the first couple of years) Also able to work for myself directly.

Now, I'm wondering if I should switch to a CDD from January 2013, just to be safe, I wont have to pay any RC pro insurance anymore either that way....

CDI's are like gold dust, even for the French, no chance of one of those in my profession, a CDD doesn't seem very attractive by comparison.

13

Has Hollande declared his long term vision for ‘France’, this post and threads are sad readings describing a future France as a very bleak place to live - one governed by self protection/interest and conformity - OMG France might need a Maggie Thatcher!!!

14

Hi

I knew about the foreign income, it was the salary thing, because it is actually a salary. I get a slip every month along with my income and then I send them an invoice they probably just throw out.... because I am not required to do that.

Other countries where I have lived in the past you could just declare foreign income on your tax return as income (one way or another), but with the social charges it's trickier. The company will not under any circumstances pay the cotisations, so... I avoided the mess by signing up for AE:)

Yes, I have been looking at the portage salaire, but they do seem kind of costly (?) and I am not so sure how this company will react to me using such a one. But it's a good suggestion. I just prefer to deal with my money myself:) Thank you for your reply:)

15

This is just so unnerving and annoying, this not-knowing; thanks for bringing it up again Finn, I am personally close to just stopping my AE.

I signed up for this because I have TR work as a extra income. I signed up as AE, even though my situation was kind of a gray zone (I work for a non-French agency, but only one, but could not get a straight answer regarding declaration of this as foreign income, what this would entail, so did the easy thing and signed up for AE). But, this not knowing what will happen next year is almost not worth the extra income.

NB. does anybody know how to declare foreign translating agency income, when you have a contract with one agency, as foreign income, and how to pay cotisation of that, if not as an AE? The answers I received a few years ago differed so much, so I didn't know who to believe:)

16

Re: CFE

As I registered in 2010, I went to Confolens (16500) tax office last week to ask for an estimate of next year's CFE as it will be my first payment.

After doing the calculation, I was given a figure which is slightly higher than the minimum CFE shown on my 2011 notice. I am expecting my bill for 2012 to arrive anytime now with the note, "Zero a payer", but that will be my last!

17

Thanks for making this an issue Finn, I had no idea until today. My partner will be forced onto the chomeurs liste, and I will be less likely to find employment in future as a part time, disabled worker. I've signed the petition and written to Sylvia Pinel, Ministre de l’Artisanat et du Commerce, to say more about what I thinbk.

18

'Proposal'. Don't worry - yet.

19

It is not yet a done deal and knowing the painfully slow workings of the french beaurocratic system it may never be. However, they are considering a number of possibilities. The first is in response to the building indutry's objection to auto-entrpreneur status as anti-competitive so they may just exclude building professions from becoming or continuing as auto-entrpreneurs.

Secondly they may change the rules to bring auto entrpreneurs in line with other small businesess as you decribe which has a few advantages for the government as the administrative regimes are already in place for this.

What they will almost certainly do, and correctly in my opinion, is to insist that all auto-entrpreneurs have public liability insurance.

Their difficulty is that some argue that auto entrpreneurs have an advantage as they pay no medical cover if they earn no money but that situation can only continue for a period of time before they would cancel the siret number. But even after that auto entrepreneurs paid over 650 million euros in social contributions and over 350 million euros in tax each year and that from a sector that previously largely worked 'on the black' and paid no contributions and no tax. It rather depends on just how idealogically wedded to the idea of abolishment they are as they must know that it would create a black hole of nearly 1 billion euros in the social security and tax budgets if they dump the scheme and replace it with something onerous.

20

Fantastic information Finn, it should be required reading for everyone. However, no one would start up in business if they did! The problem is that there is so much misinformation on the AE scheme and the worst thing is that is the administration that compound it.