Freelance designer ( Micro-entrepreneur ) invoicing to overseas clients and tax/social contributions

Banking & Financial Tax & Social charges
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#1

Hi Everyone!

I’ve recently moved to France to live with my husband and I am researching to find out more on opening a tax status which is auto or entrepreneur to allow me to work as a freelancer art director/designer from home. All of my clients are based outside of France - mainly UK and Singapore. I have some questions when it comes to paying tax/social contributions as micro entrepreneur as well as creating the invoices ( factures ) in France. Really appreciate any guidance from you guys :slight_smile:

  1. I have done some homework on tax/social contributions but im not so sure if i have gotten the numbers correct - please advise. As a designer - im falling under the category of " Les professions libérales non réglementées" I suppose and here is just an example/estimation:

Revenu ( Turnover ): 32000 euros per year *below TVA threshold
Abatement micro BIC: 10880 euros ( 34% )
Revenu imposable: 21120 euros ( 66% )
Charges sociales: 7040 euros ( 22% of 32000 )
Impôts sur le revenu: 704 euros ( 2.2% of 32000 )

---- > Am I right to say that I will pay 7744 euros a year for total tax/social contributions? But what about the 34% of abatement micro BIC - where does this come in and what part does it play if Im paying 7744 euros ( 24.2% of 32000 total turnover anyway )? I’m confused because all the french tax calculators online do not consider abatement micro BIC.

  1. As I said - all my clients are not based in France so all my previous invoices are in English. Do I need to start creating two versions of my future invoices - one in English (for the client) and one in French? Additionally, all the jobs are also invoiced in other currencies eg. GBP or SGD… is that fine to use other currency in a french facture?

  2. Lastly - Sorry its my first year in France so I have absolutely no idea on any tax matters ( my husband is not a great help either )! My husband and I each will have our own different micro-enterprise tax statuses as we work as different type of freelancers. I know we’ll need to declare and pay our tax/social contributions monthly/quarterly online separately on our entrepreneur Urssaf accounts - does it mean we still have to declare income tax together as a household annually during the period around May? Exactly how many types of tax and social contributions do we need to give as a person and as a household living in France?

Sorry - please help me! I’m so confused and I have not even starting becoming a entrepreneur! lol.

Thanks!

#2

Hello Cindy

I’ve noticed one error…

Following your figures: Revenu Imposable (taxable): 21120 euro
Therefore Impots(Tax) sur le revenu= 2.2% of 21120 euro= 464.64 euro

The other figures I have no idea about - Are Social Charges a percentage before the abatement or after ??

It is a complex area, setting yourself up in business. If all else fails, your local Tax Office will point you in the right direction. :hugs:

#3

Ah! I wasn’t sure about that as well - as I didn’t know if the income tax is calculated on the turnover or after the deduction of abatement? Anyone knows???

Thanks for pointing it out Stella :smiley:

#4

Cindy - there is so much detail that can be confusing -

Here is a link - you put your own department in and it will show where you can go for free advice. Chambre de Métiers et de l’Artisinat

https://www.artisanat.fr/

https://www.artisanat.fr/reseau-des-cma/un-reseau-de-proximite/annuaire-des-cma

#5

Based on your 2018 figures you could try running the figures through the simulateur to give you some idea…
https://www3.impots.gouv.fr/simulateur/calcul_impot/2019/index.htm

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#6

You’re overcomplicating things Cindy, it’s very simple.

Your calculations are correct as far as method goes, I haven’t checked the maths.
You don’t have to worry about the abattement, the fisc deal with that. On your tax form, you declare your turnover in the appropriate box. The fisc then deducts the abattement to calculate your RFR / taxable income. So if you write “32000” in box 32a or whatever it is (I made that up, I can’t remember the number), and you don’t declare any other income, then your avis will show your taxable income as 66% of 32000. If you do declare other income, then 66% of 32K will be added on to your other taxabe income. That’s the only time the abattement has any relevance. As far as you’re concerned throughout the year, your turnover is the only figure that matters.

There are very strict rules on invoicing. Your invoices need to be in French, they have to include certain “mentions légales” (you can be fined if you miss them off), they need to be numbered in an acceptable way, etc etc etc. FWIW I use the free invoicing tool on this site http://www.myae.fr/ which I’ve found a great boon, invoicing used to be a nightmare before I discovered it and now it’s so simple. I believe the tool does allow you to invoice in other currencies although I never have. I wouldn’t recommend sending the client a different invoice to the one on your accounting system - couldn’t you can write the French and English version on the same invoice?

Rules on what has to appear on an invoice here
https://www.federation-auto-entrepreneur.fr/tribune-expert/facture-auto-entrepreneur-mentions-legales-obligatoires
but as said above, if you use the myae tool these will appear automatically, you don’t need to worry if you’ve got it right or not.

Another thing to be aware of is that even if you don’t charge TVA, if you provide a service to clients in other EU countries you need an intracommunity TVA number and you need to make a DES declaration to the douanes, separate from your URSSAF declaration.
https://www.federation-auto-entrepreneur.fr/tribune-expert/autoentrepreneur-et-declaration-europeenne-services

#7

Thanks Anna - this is really helpful!

I guess I am complicating stuff with so much that i’ve read over the internet!

#8

Bear in mind that most businesses pay cotisations of around 40% of profit. The ME scheme is designed so that for a person with average overheads for their activity, 40% of profit equates to +/- 22% of turnover. If you have exceptionally high overheads micro entrepreneur may not be not a good choice, but if your overheads are average then it gives you the benefit of simplicity even if there’s no financial benefit, and if your overheads are lower than average then you get simplicity plus lower cotisations as well.

#9

I just have me and my computer :slight_smile: so very low overheads…

#11

Hi Cindy,
I’ve just read this thread and given that it’s now over a year old, I’m wondering if you can share with me how your experience has been setting up the ME, especially when it comes to invoicing foreign clients? I’m looking to set up an ME with similar circumstances to you but in the field of editing, proof-reading etc and my clients may be outside of France, namely the UK and Switzerland. Any tips or advice is much appreciated.

#12

Just reading this and I’m now having a bit of a panic. Is it obligatory to issue an invoice??? i ask as I’ve not been doing, just noting down my takings each month. Easy enough for me to go back to September but wondering if I missed something important here :rofl: :rofl: :rofl:

#13

I am under the impression that it is important to invoice for services. The French love a papertrail after all. I use Wave online invoices, but will next month use Zoho Invoices as Wave has pulled out of Europe. Both are free.

@Berniemac you’ll find this webpage has the answer you want.

Of all the websites out there, I find Portail Autoentrepreneur one of the most comprehensive. You might be hard pushed to tick all the boxes for correct facturation if you are doing it respectively. To be fair, my electronic invoices are not up to the standard required described in this article, and I don’t have an intercommune TVA number. There was too much paperwork to do when I got set up. I have already billed UK clients. So fingers crossed that I don’t get an audit.

The easiest thing to do is invoice them in Euros and let them deal with conversion.

Tim

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#14

Thanks Tim, I’ll have a read and get my s(*&% together :rofl: :rofl: :rofl:

#15

Hi there,
Yes I think i had been complicating some stuff in the beginning and that was just because I was new to the whole ME thing in France. But indeed its actually quite straightforward but then I actually got a lot of help here - https://www.startbusinessinfrance.com/ if you dont mind paying an annual fee and you could get some very useful advices and actual help from a professional who knows exactly what you need do based on your personal situation with ME/Social Contributions/Tax issues etc. For the invoice - you just need to create a basic invoice with your french siret/siren number that is created from your ME status and its fine to use the same invoice ( or you can create two versions for each : english + french for your own record ) to send to foreign/local clients. I dont see much difference invoicing foreign or local clients - just make sure you have a separate bank account from your personal one solely used for business where all your clients pay to - its easier for bookkeeping. Im not an expert here and you could ask other for better advices though…

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#16

Thanks Tim for your message and info, I’ll take a look at the websites you mentioned.
Cheers,
Bernie

#17

Hi Cindy,
Thank you so much for your message and the tip https://www.startbusinessinfrance.com/. My French isn’t too bad but when it comes to tax and legal stuff, it can be confusing. I’m getting excited about working again but then when I look at all the info on ME’s, I get discouraged so this website looks like it could be my helpline, thanks again!

#18

An update of getting an intra-communale TVA number if you are a AE below the TVA threshold and working for clients outside of France.

You can apply from your messagerie securisee (sorry, no accents today, I am on the wrong computer), in your professional Impots account and just copy and paste in the model letter from the Service Public

Demande d’attribution d’un numéro de TVA intracommunautaire à un assujetti non redevable (Modèle de document) | service-public.fr (service-public.fr)

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