Changes in the air : Auto Entrepreneur, social charges & more

It’s ‘La Rentrée’ in France and like every September, it begins with the rush of parents getting their children to school, them getting back to work or their pre-holiday plans and of course a whole new holiday season for the elderly who want to avoid the busy season.  The temperatures drop almost overnight, the children catch their first colds before they even get to school and us Southerners who have been complaining about the heat for 3 months, start complaining about the cold – it’s the way it is!  Every year 🙂

photo 2 (3)This September is particularly marked however as many of us have been waiting with baited breath to see what the new reforms are going to be in France.  During his election campaign Macron promised many reforms if he was elected. Of course he did get elected but then we wait to see if he will follow up with his promises.

As a paperwork expert in France for over 25 years, you can imagine that ‘La Rentrée’ of the government this week has been fascinating for me. This will affect not only myself but many of my clients, so I really need to know what’s going on, straight away!  There are lots of changes in the pipeline for businesses and individuals alike and of course I cannot go into details of each one, but here are a few of the changes.

Details and in depth look at some of the reforms and how they will affect you in your business, in your daily tasks, will be discussed at the LBS event in Sophia Antipolis on 28th September.  To book your place, click here

So let’s take a look at some of some of the announcements briefly as more information will be coming out as we go along:

Increase in CSG – What is this?

This is a tax that is levied that is put towards social protection.  Since its creation in 1991 it has increased from 1.1% to 7.5% in 1998.  The social charges are applied to a variety of income sources, such as income from investments, rental income and capital gains.  From January 2018, it will increase another 1.7% to 9.2%. This will affect a lot of retirees who receive more than approximately 14K euros.  Small retirement pensions will not be affected, people who are receiving unemployment benefits.  More details to come.

Auto-Entrepreneur – earnings limits increase

Great news for Auto entrepreneur, the limits are going up from January 2018, the numbers announced are :

  • 70 000 euros for service related activities
  • 170 000 euros for commercial related activities

Will this be good for Auto entrepreneurs and there are over a million of you out there!  Of course very good for those that are on the edge of the limits and do not have high costs. However, bear in mind that you pay your fixed percentage on your top line so if you earn 60K as a service based Auto Entrepreneur, your social charges will be much higher.  Make the calculation and if you have any questions, please feel free to contact me.

No changes in the VAT levels.

RSI Abolition – Will this change anything?

RSIYes, the RSI will be abolished with effect from 1st January 2018 and there will be a 2-year transition period.  This reform affects more than 6.6 million people in France currently under the RSI system (regime social d’independents).  The details of this transition are not yet known but LBS will be following closely.

One thing to take into account is that the social charges of independent workers and micro enterprises in comparison the ‘general’ salaried system are completely different so this should not change.   However, the RSI will be transferred to other local agencies: CPAM, URSAFF.  There is a lot of information to look at for this huge reform as it will affect a lot of people and LBS will keep you informed. Ensure you join our facebook page here to get top tips and updates

CFE Exoneration

Professional tax exoneration for companies with a turnover of less than 5,000 euros. This will help smaller AE’s to be able to get started, very good news.

What is happening with our Social Charges

cotistationsSome very good information here.  First year exoneration of social charges for new companies who have a turnover less than 30K per year. To be looked at in more detail as there is a sliding scale for the exoneration but this is a step in the right direction.  More to come as soon as it becomes available.

Independent businesses will see their social charges decrease by 2.5%.  The second reduction will be 1.5% for sickness contributions for independents who’s turnover does not exceed 43K.

Taxe d’habitation

This tax is being reformed and over 30% of households should benefit from this reduction however it is not yet clear who will benefit and who will not.

Watch this space and don’t forget to join the LBS facebook page or join the newsletter to get top updates.


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