Micro-Entrepreneur Tax

Hi all,

I’m new here, so I hope this is ok to post…

I’ve recently moved to South France with my wife (no children). I’m registered as a Self-Employed Website Designer, and everything has been setup for my tax as a Micro-Entrepreneur.

However, I am getting conflicting (and confusing!) reports on how much tax I should be putting away. I’ve used various online calculators, but even they are throwing out different percentages at me.

I’m aware of the CFE tax, and think I’ve got that worked out, but totally confused on the social charges AND income tax - are they the same thing or different?

I think I’ve worked out that because I’m a service, I have to pay around 22% social charges (I’m paying per month). I also have opted for the Pay as you Earn thing where it adds 2.2% on top. That’s where my confusion comes in. At the end of the year, do I have to still pay any income tax, or have I paid that alongside my Social charges? I’ve read horror stories of people saying be prepared to pay 50% tax or more…

But the way I’m working it out, I’m more likely to be around the 20-30% overall tax (social charges + income tax + CFE).

Any help would be hugely appreciated on what percentage I should be putting away, as 50% feels like a LOT! I guess I’m really looking for a bottom line: Put away x% for tax, maybe with a dumb-dumb explanation of why. FYI I earn between €50-60k per year.

Social charges and income tax are not the same. We are not ME regime so can’t help with detail, but social charges are around 22% and overall tax rates for 2019 are below.

Barème d’impôt sur le revenu 2019 sur les revenus perçus en 2018
Jusqu’à 9 964 € 0%
De 9 964 € à 27 519 € 14 %
De 27 519 € à 73 779 € 30 %
De 73 779 € à 156 244 € 41 %
Supérieure à 156 244 € 45 %

Thanks for the reply Jane!

Sorry yes, I may have mis-typed my question, I meant is the additional 2.2% that I pay ON TOP of my social charges, per month, INSTEAD of the income tax or does it just contribute towards it? Is that additional amount the same as the income tax, or additional.

If I put away 24.2% tax, will I get an income tax bill at the end of the year still, with the 2.2% taken off or is 24.2% the full amount I’d be paying tax (+ the CFE)

OK so you’re paying 22.2% social charges, that is obligatory and that’s your social charges taken care of.
If you’ve also opted to pay your income tax at the flat rate of 2.2%, then that is also your income tax taken care of you don’t pay any more tax on your ME earnings.
Make sure you declare your earnings in the right box on the tax form.

If you have no other household income apart from the ME, your RFR (total household taxable income) will be shown on your avis as 64% (or is it 66%, I can never remember) of your turnover, and if you’ve been paying income tax on prélèvement libératoire, and you will have 0€ tax to pay.

If there is other taxable household income for you or your wife, whether earned or unearned - bank interest etc etc -this will be added to the ME figure and will be taxed in the normal way, ie presumably at 30%.

(The theory is that paying 2.2% tax on your full turnover from the first €, should work out very roughly the same as paying tax at the “normal” rate on profit only, with the tax free allowance deducted. Whether it does or not I have no idea, I’ve never checked.)

Hope this helps.

EDIT - there did used to be a threshold above which paying flat rate tax was not an option. I presume you’ve checked this. I think used to be around 30k, however I assume that it’s been increased in line with the increase in permitted turnover.

Ah thank you! That does make sense.

Does anyone know what happens if you pay the flat rate but go over the threshold in the year? (Last I saw it was around €26,000 per household ‘part’, which I’ll be over).

I was advised to register on the flat rate PAYE setup because it is becoming mandatory in 2019 anyway, and the threshold was in relation to income from 2016… at whcih time I was in the UK so won’t ‘run into trouble’ as they say, because France won’t have a record of my income them - not sure if that was bad advice or not! :confused:

Hi Russell and welcome to the Forum.

I just googled and there is loads of info… it seems that Micro/auto are either one and the same … or run on similar lines.

Perhaps you could have a word with whoever got you onto the Micro-entrepreneur route. They will have info on the ceilings.

I believe that there is no leeway in 2019… if you go over the ceiling you automatically move up… but check out this website…see what you think…

Yes you’re right - I haven’t really taken in how the PAYE will work going forward as in fact I’m about to close my ME business so it won’t affect me, however I do have various links that I’ve been sent so I’ll dig them out and post them later if I remember.

In any case if when you submit your tax form the fisc find anything “irregular” I guess they will simply recalculate and bill you for the difference.

Hmm, not sure about that. France used to use the N-1 / N-2 / N-3 formula quite a lot, eg for calculating social security cotisations for inactifs (for some reason Year N cotisations used to based on N-2 earnings) and when inactifs first arrived in France CPAM/URSSAF simply asked them for their UK tax returns for the relevant years, and used the figures from that. However they do seem to be moving away from that formula towards basing everything on more current figures.

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@anon27586881 … re previous earnings, thresholds etc… might it be an idea for @russellclow to visit his local Tax folk and get some info from them ??? (just wondering) :thinking:

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Yes definitely - I think visiting the tax office at an early stage is an excellent idea because it usually comes as a pleasant surprise to Brits to discover how approachable and friendly they are, especially compared to HMRC. I guess it depends when he started trading whether he’ll be declaring income for 2018 or not, but either way, going along to ask the question sounds a good plan.


@russellclow … Anne’s advice is always good… so, go and speak with your local Tax Folk… asap.

Good afternoon everyone
As you were so helpful on my previous questions, here I am again. I am completing forms to register as a micro-entrepreneur ( I am a teacher and will be working on an ad-hoc basis for a private school as well as hopefully diong private tuition and classes). After several frustrating attempts I am now stuck on the question

Vous relevez du régime fiscal micro (BIC ou spécial BNC)
Option pour le versement libératoire de l’impôt sur le revenu calculé sur le chiffre d’affaires ou les recettes

Do I say yes or no?

Is this to do with PAYE or total family earnings? The end is in sight with the form so I would very much appreciate any help anyone can offer.

Many thanks

If you want to pay your income tax on your micro entrepreneur this way you tick yes.
If you don’t you tick no.
There is no right and wrong answer, it is a decision for you to make. Assuming you are eligible, you need to work out you which would be most beneficial to you - paying your income tax at a flat rate of 2.2% of turnover, or declaring your micro entrepreneur income on your tax return at the end of the year and paying tax as per the normal barème - see Jane’s post, third in the thread, for the tax bands, and 66% of your turnover will be accounted as profit ie subject to tax.

Working “self employed” for a school sounds like a bit of a grey area, in cases like this there is often a question mark as to how “independent” the worker really is in terms of setting their fee, choosing when, where and how to do the work, providing their own equipment and materials, delegating to another person if they want, etc, and it can be a typical disguised employment scenario. However from your profile it looks as if you might be making arrangements more with the parents than with the school? Just be careful that it’s kosher self employment and try to avoid getting paid in a way that would look to an inspector as if it’s a salary, ie the same amount going into your bank on the same day every month from the same “client” and no other income, because that is not the income pattern of a self employed person. This is France, you need to watch your back where employment law is concerned.
Pob lwc :grinning:

Hi Anna
Firstly thank you for all your advice. At present I will be teaching some lessons, (so far 2 on a Monday) at an independent language school. I will get paid by the hour for which I will invoice the owner of the school. At present, it’s just him and me. I will make some resources and also use the resources already there. I will use my car/ fuel etc to travel there. As I am new to the area I gradually hope to build up my business and offer lessons/ courses in my area. I need to find a suitable room for which I will probably have to pay rent. I hope also to give private lessons in people’s homes. I don’t think my earnings will be substantial in this first year but who knows. Am I correct in thinking that if they are lower I should choose to pay at the end of the tax year? Will I ultimately pay the same rate of tax? Sorry to bombard you with questions. I have been swamped with paperwork since arriving and I want to make sure I am getting this right. It is still my hope to be employed as a teacher in a private school but in the meantime, I need to become self-employed. Thank you.

Sounds like a good enough way to get started.
Re the tax, obviously it would be daft to opt to pay the flat rate tax if your annual earnings are going to be below the tax threshold or only just above. It should be easy enough for a numerate person (which I am not) to do the sums and work out break even point. And if you make the wrong choice this year, you can switch for next year, it’s not like you are stuck with it forever.

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