Taxation of Agricultural Profits: Which Regime Applies?

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Farmers in France are taxed under the category of agricultural profits (bénéfices agricoles – BA) for income tax purposes. Depending on the farm’s revenue and the chosen tax option, one of three regimes may apply: micro-BA, simplified actual, or standard actual regime.

What Activities Fall Under Agricultural Profit Taxation?

Agricultural income includes earnings from individuals or members of partnerships not subject to corporate tax, who operate rural land and engage in production or consumption of agricultural goods. This includes:

  • Forestry operations

  • Mushroom cultivation (above and below ground)

  • Beekeeping, poultry, fish, oyster, and mussel farming

  • Development of new plant varieties (intellectual property revenues)

  • Sale of dry or wet biomass derived mostly from on-farm products

  • Renewable energy production (solar, wind, biogas) from agricultural by-products

  • Food/feed processing (e.g., sugar, butter, starch)

  • Certain equestrian activities (training and prepping horses, excluding entertainment)

The 3 Taxation Regimes for Agricultural Profits

1. Micro-BA Regime

  • Eligibility: Applies if the average revenue over the past 3 years is below €82,800 (excl. VAT).

  • Taxable income: Calculated using a 3-year average of gross income, reduced by a flat 87% deduction (representing expenses), with a minimum deduction of €305/year.

  • Filing: No special tax form needed—just a complementary income declaration (Form 2042-C-PRO).

  • Benefits: Simplified bookkeeping, similar to that of micro-entrepreneurs.

2. Simplified Actual Regime

  • Eligibility: Applies if average annual revenue over the last 2 years is between €82,800 and €350,000.

  • Taxable income: Based on actual net profits. Accounting rules are simplified: only cash transactions need to be recorded daily, with debts and receivables accounted for at year-end.

  • Filing: Requires submission of Form 2139-SD by early May, with simplified financial statements and income declaration (Form 2042).

3. Standard Actual Regime

  • Eligibility: Mandatory if average annual revenue over the past 2 years exceeds €352,000.

  • Taxable income: Also based on net profit, but with stricter accounting standards, including detailed books, inventory records, and comprehensive financial documentation.

  • Filing: Form 2143-SD must be submitted by early May, along with standard income declaration (Form 2042).

Note: Without membership in an approved management organization (organisme de gestion agréé – OGA), the taxable income is increased by 25%.