Taxation of Sole Proprietorship Status
1.Taxation of profit on behalf of the operator
- Progressive RSI (Régime simplifié d’imposition) scale: In the absence of its own legal personality, the sole proprietorship and its operator form a whole.
The company’s profits are included on the return and are taxed, under a single classification on the progressive income tax scale, with the other income of the operator and other members of his tax household. All profits are taxed as soon as they are earned, even if the operator does not deduct them and decides to reinvest them in the farm.
The sole proprietorship cannot opt for corporate tax (Impôt sur les société), unless the sole proprietor adopts the new EIRL status. He can then opt for the RSI without creating a legal person, but this option is in principle irrevocable. Under certain conditions, a waiver of the option is possible within 5 years of its exercise. This waiver is final. The operator remains taxable to the RSI on the remuneration and dividends paid by EIRL.
- In case of deficit: In the event of a loss in a year, the entrepreneur can deduct his losses from his other income from his tax household (total income) in the same year. If the overall income is insufficient to fully absorb this professional deficit, the excess deficit can be carried forward to the overall income for the following 6 years.
2.Determination:
