|
This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
 Professional activity
Commercial activity (BIC)
Election
Joining a " CGA "
Reduced corporate tax rate for small and medium size businesses
 Professional activity
|
Annual turn over out of VAT
|
|
|
|
|
|
Tax regime
legally
Applicable
|
Sales not exceeding
27 000 €
|
Sales in the range of
27 000 € and 230 000 €
|
Sales exceeding
230 000 €
|
|
|
Income tax regime for professional activity
|
Specific income tax
regime & filing for very
small businesses
|
Standard tax filing obligation
|
Standard
tax filing obligation
|
|
|
VAT regime
|
VAT exemption (1)
|
Simplified
tax filling obligation
|
Standard
tax filing obligation
|
|
|
Possible
combined
elections
|
Standard income tax filing obligation & VAT exemption
Standard income tax filing obligation & simplified filing obligation for VAT
Standard income tax & VAT filing obligation
|
Standard income tax
& VAT filing obligation
|
|
|
(1) Lawyers, artists and authors benefit from an exemption should their annual income not exceed 37 400 euros (figures for 2002).
Advice: Be aware that exceeding the turnover threshold triggers new filing obligations.
Commercial activity (BIC)
Turnover thresholds
Tax regime applicable to very small businesses
Simplified and regular tax regime
Turnover thresholds
|
Annual turnover out of VAT
|
|
|
|
|
|
Tax regime
legally
Applicable
|
Not exceeding 76 300 €
(Resale business
27 000 € (services)
|
In the range of
76 300 and
763 000 € (Resale business)
27 000 and
230 000 € (services)
|
Exceeding
763 000 € (Resalebusiness)
230 000€
(services)
|
|
|
Income tax regime for commercial activities
|
Specific income tax
regime & filing for very
small businesses
|
Simplified income
tax filing
obligations
|
Standard income
tax filing
obligations
|
|
|
VAT
|
VAT exemption
|
Simplified tax
filing obligations
|
Standard tax
filing obligation
|
|
|
Possible
combined
elections
|
Simplified income tax filing obligations & VAT exemption
Simplified income tax and VAT regimes &
filing obligations
Simplified income tax filing obligations and regular VAT filing
obligation
Standard income tax filing obligations
and VAT exemption
Standard income tax
& VAT filing obligations
|
Standard income tax
& VAT filing obligations
Standard VAT
filing obligations
|
|
|
Advice: Be aware that exceeding the turnover threshold triggers new filing obligations.
Tax regime applicable to very small businesses
Not applicable to partnerships
For commercial and professional activities, applicable only to self employed entrepreneurs
Very roughly the taxable result is equal to:
63% of the annual turnover out of taxes for professional activities
28% of the annual turnover out of taxes for resale business
48% for services (figures for 2002)
Losses are not tax deductible or carried forward against the other categories of income
Limited filing obligations (figures related to the business should be reported on the annual income tax return)
Simplified accounting process
Entrepreneurs must apply to VAT exemption i.e.
No filing obligations
No VAT payment
No input VAT
No possibility to apply for a VAT refund
No mention of VAT on the invoices
Invoices must indicate that VAT is not applicable according to section 239B CGI.
Simplified and regular tax regime
Applicable to self employed and companies subject to corporate income tax.
Election
Advice: Be aware of deadlines and election's time limits. Once the election is made, exceeding the applicable turnover threshold triggers a change in tax regime and filing obligations.
|
Election process
|
|
|
TVA
|
Can be made anytime
Written election
Renewal by tacit agreement |
|
Commercial activity/
Election for simplified
regime & filing
|
Before February 1st of the taxable year
Wriiten election |
|
obligations
|
Renewal by tacit agreement |
|
Commercial activity/
election for regular tax
regime & filing obligations
|
Before February 1st of the taxable year
Written election
Renewal by tacit agreement |
|
Professional activity/
election for standard tax
regime & filing obligations
|
Before April 30 of the year of the filing of the tax returnEx : for FY 2002 tax results before April 30 2003
Election made on the tax return itselfRenewal by tacit agreement
|
Newly created enterprises may apply for the tax regime of their choice when accomplishing formalities for registration and publication. However, it is recommended to inform also the tax office by mail with acknowledgment of receipt.
Joining a " CGA "
CGA are associations whose role is to provide management and accounting services, assistance in tax filing obligations to businesses. Tax authorities are supervising the provided services. All enterprises whatever their tax regime have the right to join a CGA.
When joining a CGA, self employed entrepreneurs taxable according the regular tax regime benefit from a 20% standard deduction on their taxable result up to 113 900 euros for FY 2002. This tax incentive is only applicable to self employed entrepreneurs .
Other incentives are available to all members of a CGA such as tax credit and penalty relief in case of reassessments.
Reduced corporate tax rate for small and medium size businesses
Small and medium size businesses benefit from a reduced corporate tax rate on a fraction of their taxable result if the conditions listed bellow met:
Be subject to corporate income tax
A turnover not exceeding 7 630 000 €
At least 75% of the capital holds by individuals
lcapital fully contributed
The taxable result including long term capital gains, up to 38120 € is taxed at 15, 45% instead of 35,43% (Additional contributions included).
|
Close
