In France, a private entrepreneur can choose from several statuses: “micro-entrepreneur”, “travailleur indépendant” (independent worker), or “freelance”.
Different income limits are set for various types of activities. If you are engaged in craft activities or providing services (for example, as a translator, coach, or consultant), your annual turnover must not exceed €77,700. For commercial activities, such as selling goods or restaurant business, the limit is set at €188,700. If you exceed these limits, you’ll need to change your status. However, everything is individual.
Overall, the French tax system is not simple. For example, self-employed workers in France must make monthly or quarterly social security contributions. The exact amount depends on the chosen tax regime. For instance: workers with micro-enterprise status pay social security contributions at rates from 6% to 22%, depending on the nature of the business. Therefore, we provide you with only a guide-orientation, but you can calculate your exact taxes with specialists, knowing specifically what you will do.
How to Register: Step-by-Step Process
The good news is that French bureaucracy is becoming increasingly digitalized. All stages of your enterprise’s life, from registration to possible closure, are carried out through the portal: formalites.entreprises.gouv.fr. This site is a “one-stop-shop” for entrepreneurs. By the way, we recommend checking the “S’informer” section – there’s lots of useful information for beginners.
When you start registration, the system will ask you to choose a business format. You need to select “Entrepreneur individuel” – this is the status of an individual entrepreneur.
Tax System: Complex but Logical
The most interesting aspect of the French tax system is its progressive nature. Simply put, the more you earn, the higher percentage you pay. The system works in tiers:
– Earning less than €10,000 per year: no income tax at all
– From €10,000 to €26,000: 11% rate
– From €26,000 to €74,000: 30%
– Up to €160,000: 41%
– Over €160,000: maximum 45%
Family Approach to Taxation
A unique feature of the French system is that taxes are calculated not for each individual separately but for the whole family. For example, if you’re a single parent with a child, you might not pay tax even with income above €10,000.
How to Optimize Taxes Legally
In 2024, French legislation allows reducing tax burden through various deductions. You can account for expenses on:
– Family housing acquisition
– Security
– Social needs
– Medical services
– Children’s education
– Care for incapacitated family members
Special benefits are provided for military personnel and philanthropists. However, keep in mind that notary services for real estate purchases don’t fall under deductions.
What Are the Advantages of Private Entrepreneurship in France?
– You can combine entrepreneurship with other work
– No start-up capital required
– Simple social contribution system
– You only pay taxes when you make a profit
The French tax system is quite complex but logical and flexible. The progressive scale from 0% to 45% is compensated by the ability to reduce the tax base through family status and various deductions. But don’t forget about local nuances – each department has its own taxes and benefits, which should be considered when choosing a location for your business.