Micro-Entrepreneurs: Opt for the Fixed Tax Payment Before September 30, 2024
If you are a micro-entrepreneur and wish to benefit from the fixed tax payment on income earned from 2025 onwards, you must submit your request by September 30, 2024. This option needs to be communicated to the relevant social security organizations based on your location.
It’s important to note that this option is only available under certain conditions. Specifically, it is reserved for micro-entrepreneurs whose household’s reference tax income (RFR) for the year N-2 (which would be 2023 for 2025 income) does not exceed the following thresholds:
– €28,797 for a single person,
– €57,594 for a couple (two shares),
– €86,391 for a couple with two children (three shares).
This threshold increases by 50% for each additional half-share or by 25% for each additional quarter-share.
In cases where the household situation changes between year N-2 and year N (due to marriage, birth, divorce), the tax situation in year N-2 is considered. For example, if a micro-entrepreneur was married in 2023 but is now divorced, the threshold of €57,594 still applies. There is an exception for those who were part of their parents’ tax household in year N-2, where only the micro-entrepreneur’s income is considered.
Note:
If a new activity is launched, a micro-entrepreneur can opt for the fixed tax payment from the creation date of their business without waiting for September. In this case, the option must be made no later than the last day of the third month after the business is created. To do so, you simply need to check the appropriate box in the activity declaration form (P0 micro-entrepreneur).
The fixed tax payment is calculated by applying specific rates to the micro-entrepreneur’s revenue:
– 1% for sales and accommodation services,
– 1.70% for BIC services,
– 2.20% for BNC services.
The tax declaration and payment are made through the Urssaf (for liberal professions affiliated with the Cipav), via the RSSI payment centers, or through the website www.autoentrepreneur.urssaf.fr.
Failure to submit the option within the deadline or not meeting the conditions will result in the loss of eligibility for the fixed tax payment.
If the micro-entrepreneur wishes to revert to the standard tax system, the same process applies. The option for the fixed tax regime is valid for the entire year and is automatically renewed. To withdraw from this regime for 2025, the option must be revoked before September 30, 2024.
Note:
Exiting this regime can also happen “involuntarily.” The fixed tax regime ends either in the year when the micro-BIC or micro-BNC system no longer applies, or in the second year after the household’s reference tax income exceeds the above thresholds.
In conclusion, if you’re a micro-entrepreneur looking to secure the fixed tax payment for 2025, make sure to act before the September 30, 2024 deadline. For assistance in navigating the process and ensuring everything is handled correctly, reach out to ESCEC International, your ultimate accounting firm in France.
