Micro regimes help simplify French income tax

These apply only if the income is under certain ceilings.

They involve deducting a set amount for expenses and are an alternative to réel (real) methods of declaration which involve declaring, and keeping proof of, actual expenses.

After the set deduction, the remainder of the income is taxed under the usual bands.

The micro-BIC and micro-BNC tax regimes are for small businesses and certain other incomes, such as from letting, and the set amount deducted for expenses varies by sector. They are called micro as they minimise formalities.

Small businesses set up under these are called micro-entreprises and do not have to prepare or submit accounts (this does not mean book-keeping is not required).

It includes those formerly known as auto-entrepreneurs, a term that no longer officially exists but is still used informally.

Turnover thresholds for these tax regimes are €170,000 for work that involves buying/selling and for tourist letting accommodation such as chambres d’hôtes, and €70,000 for other types of income, including for services and professions libérales.

There are two versions:

• Micro-BIC (BIC = bénéfices industriels et commerciaux, or industrial/commercial profits). It is mostly for firms involved in buying and selling. It is also used for furnished lettings (tourist or general). Turnover may have 71% or 50% deducted.
• Micro-BNC is for activity classed as “non-commercial”, such as the professions. A set 34% is deducted in this case for expenses.

 Note that micro-entreprises may alternatively opt for the versement libératoire income tax paid at fixed rates on turnover, monthly or quarterly, at 1%, 1.7% or 2.2%, depending on sector.

There are specific income limits for this (currently €27,017 revenu fiscal de référence for 2017 income for a single person). Micro-entre-prises also pay their business social charges on turnover, at set rates depending on sector.

Another simplified tax regime is the micro-foncier. This is for unfurnished rentals and land income up to €15,000. Foncier means relating to land.

Turnover may have 30% deducted for expenses so only 70% of rental income is taxed.

This is an extract from our French Income Tax 2019 helpguide, priced €14.50. It is on sale in selected newsagents across France. You can also order a printed or PDF copy at the helpguides section of connexionfrance.com or call 06 40 55 71 63. P&P charges are added for printed copies.