So, you have set up as a micro entrepreneur in France (or planning ahead), and you would like to understand clearly what is this that you have to do on a regular basis to be in line with all the regulations. This article will sum up the most common points relevant to the majority of self-employed business owners. Please note that if you operate in one of the regulated sectors, you may have additional obligations. There are also additional rules to consider when you have premises open for public access that are not covered in this article.

Declarations to Make

URSSAF declarations

You need to create an account on the autoentrepreneur URSSAF website. This is where you must declare your turnover every month or every three months (depending on how you registered), and pay social security charges. Please note that quarters for your declarations are calendar quarters (January-March, April-June, July-September and October-December), and are not linked to your start date. You must file your declaration for “0” if you did not have any income. For declaration, you take into consideration the date you have received the payment, and the full amount paid by the customer (so if they pay 100 euros, and you receive 98 due to bank/credit card/PayPal commission, you declare 100€). Your first declarations after setting up are delayed. If you declare monthly, the declarations for the firsth 4 months (month during which your start date takes place, and 3 full months) are due altogether after the 4th month is over. So for example, your start date is in May. Your declarations for May, June, July and August will ben due in September. If you declare quarterly, you declare first two quarters together. To take the previous example, you fill declare your revenues for the 2nd quarter (from start to en of June) and the 3rd one (July-September) in October.

Professional account on tax website – CFE

You also must create an “espace professionnel” on impots.gouv.fr website. This is where you manage and pay CFE (local business) tax. You will also need it for VAT declarations if you cross the threshold, but every business owner must create their professional account from the start.

Personal account on tax website – income tax

Income tax and social security charges are two separate payments that are calculated very differently and collected by different agencies. Income tax is calculated based on the total income of your family unit. Micro entrepreneurs can opt in to pay income tax together with social charges (règlemente libératoire), if they fulfil the conditions. This is advantageous for those whose overall income tax % is quite high.

In any case you need to fill out the personal income tax declaration every spring in April – beginning of May.

VAT

When you start out as a micro entrepreneur, you are automatically registered for “franchise en base” for VAT, meaning you do not collect TVA from your customers, and you cannot claim back any that you pay. You must register as a VAT collector once you cross a certain threshold, or you can do so voluntarily – this makes sense if you pay more VAT than you collect, for example if your purchases are in France, and sales are outside of EU.

If you sell goods, or electronic services (downloadable PDFs or other files for example) to non professional customers in EU, you must be aware of the 10000€ threshold after which you must charge VAT to you customers according to their country of residence.

If you provide services to professional (VAT-registered) customers in EU, you must obtain your VAT number and file DES (declaration européenne des services) monthly on douane.gouv.fr website from the start.

Other Obligations

Bank account

You are under obligation to open a separate bank account for your activity if your turnover reached 10 000€ in a calendar year. All you business related revenues must go into that account. I personally consider it to be good practice to open a separate account from the start, and make it a habit to use professional account for all professional revenues and expenses. This habit will be very useful as your business grows, and will facilitate greatly any controls you might have regardless the size of your operation. Please note that as a micro entrepreneur you have no obligation to open a business account, a second personal account is sufficient.

Bookkeeping

Is very simple. All your records should be based on money movements – in and out, for microentrepreneur you have no obligation to keep records of obligations to pay or receive (while this still may be a good idea for you to track those to ensure financial health of your establishment)

You must keep records of your income: one line per receipt, detailing customer, amount, date received, method of payment, invoice number. You must also keep the same records for your expenses, and a separate list of your fixed assets (large purchases over 500€HT that you use for business over a long period of time).

The invoices you issue must comply to a number of regulations and be kept, as well as receipts for purchase, for at least 6 years (10 if you are VAT registered).

For cash register, there is no obligation to have one – you can keep the records by hand in the register book. But if you have one, and especially if you are VAT-registered, you must be in possession of a certificate of conformity to French law.

You have no obligation to use accounting software.

Insurance

“Assurance de responsabilité civile professionnelle” covers you in case of damage caused voluntarily or accidentally through your business activity. It is obligatory for certain types of activity (such as construction for example), and is strongly recommended for everyone else.

Important: Every situation is different and may need professional advice. The information on the Compte Plus website is general and should not replace legal, accounting, or tax counsel. If in doubt, contact a specialist for tailored advice.