For many micro-entrepreneurs in France, taxation can feel confusing. One of options is the “versement libératoire de l’impôt sur le revenu” (sometimes called the flat-rate discharge payment of income tax) – in brief, it allows micro-entrepreneurs to simplify how they pay income tax and, in some cases, reduce their overall tax burden. A lot of my clients have difficulty making their decision whether to opt in for this regime when creating their micro-entreprise (or later on). This article aims to explain this option in more detail as understanding how it works can help you decide whether it is the right choice for your business.

How does income tax work without Versement Libératoire?

Please note, that under classic taxation scheme, monthly or quarlerly payments to URSSAF are not taxes, but social security contributions. So micro entrepreneur pays URSSAF throughout the year, and then the next spring has to declare his or her revenue on the personal income tax declaration and pay income tax.

In France, income tax is calculated on a progressive scale per household: all revenues of household memners are added together, and divided by household tax parts. The result determines which tax brackets the income falls into and how much tax will be paid.

For micro-entrepreneurs, as they are not allowed to deduct real expenses, there is a flat rate deduction (abbatement forfataire): the full annual turnover must be declared in the declaration, and the tax office will calculate the taxable amount (50% of turnover for commercial and artisanal services (BIC), 64% of turnover for liberal/non-commercial services (BNC) and 29% of the turnover for sales of goods, 305€ being the minimum deduction possible).

What Is the Versement Libératoire?

The versement libératoire is an optional tax system available to micro-entrepreneurs. Instead of paying income tax through the normal progressive income tax scale, you pay it directly to URSSAF at the same time as your social contributions.

The tax is calculated as a fixed percentage of your turnover (chiffre d’affaires). This means you know exactly how much tax you owe each time you declare your revenue.

The main advantage is simplicity: tax is paid regularly throughout the year, usually monthly or quarterly, together with your social contributions.

Tax Rates

The rate applied depends on the type of activity carried out by the micro-entrepreneur:

• 1% of turnover for activities involving the sale of goods or accommodation (except LMNP which has it’s own rules)
• 1.7% of turnover for commercial or artisanal services (BIC services)
• 2.2% of turnover for liberal professions (BNC)

For example, if a freelancer providing services generates €30,000 in turnover during the year and is eligible for the 1.7% rate, the income tax paid through the versement libératoire would be €510.

Who Can Use It?

Not every micro-entrepreneur can choose this option. The main condition is related to the household’s taxable income.

To qualify, the revenu fiscal de référence (RFR) of your household from two years earlier must not exceed a specific threshold. The threshold changes every year, it is for example €29,315 per tax share for eligibility in 2026 (revenues of 2024, declared in 2025). The threshold increases depending on family size because it is based on the French “quotient familial” system.

To check, consult your personal tax declaration, for the year in question. On the first page, find your “revenue fiscal de refence”, and number of tax shares (nombre de parts). Divide the revenue by the number of shares, and see if the resultn is below the threshold.

In addition, you must still meet the general conditions for the micro-entrepreneur regime, including remaining below the turnover thresholds applicable to this business structure.

What does it mean in practice?

If you would like to explore the practical aspects of the versement liberatoire:

• when and how to apple
• what happens with your personal tax declaration
• how to evaluate which option is more adavntageous for you

Read the full article on Grow! with Compte Plus – a knowledge base about running a small business in France.

Please do not hesitate to contact me if you would like to receive personalised information about your business project.

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.