Taxation of Micro-Enterprises in France

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If you operate as a micro-entrepreneur in France, your business falls under the micro-tax regime for income tax and the micro-social scheme for social contributions. These simplified systems are designed to streamline reporting and reduce administrative burdens for small businesses.

Eligibility Criteria for the Micro-Tax Regime

To qualify for the micro-enterprise tax regime, your annual turnover (excluding VAT) must not exceed specific thresholds, which depend on your activity:

Turnover Limits for 2024 (income declared in 2025):

  • Commercial or accommodation activities: up to €188,700

  • Provision of services (BIC or BNC): up to €77,700

  • Rental of classified tourist accommodation: up to €188,700

  • Rental of unclassified tourist accommodation: up to €15,000

Turnover Limits for 2025 (income declared in 2026):

  • Classified and unclassified tourist rentals: €77,700 and €15,000 respectively

  • All other services: €77,700

If you run mixed activities (e.g. sales and services), the total turnover must remain within €188,700, with each category not exceeding its respective limit. Exceeding these thresholds will automatically exclude you from the micro-enterprise regime.

👉 Note: For businesses created mid-year, thresholds are adjusted proportionally, unless the activity is seasonal.

How Does the Standard Micro-Tax System Work?

Under the basic micro-tax system, your income is taxed under the personal income tax (IR) framework, either through the standard tax system or an optional flat-rate withholding tax (“prélèvement libératoire”).

You will be taxed as follows:

  • Industrial, commercial, or craft activities fall under the micro-BIC category.

  • Liberal or freelance professions are classified as micro-BNC.

You don’t need to submit a profit and loss statement. Instead, you must report your gross turnover on the 2042-C Proform in your personal tax return:

  • BIC income → “Industrial and commercial income” section

  • BNC income → “Non-commercial income” section

  • Also include your personal details, SIRET number, and income category.

Flat-Rate Deduction for Expenses

The tax authority calculates your taxable income by applying a lump-sum allowance to your turnover:

  • 71% for commercial activities

  • 50% for BIC service activities

  • 34% for BNC activities

Minimum deduction: €305
For mixed activities, deductions are calculated separately for each type, with a combined minimum of €610.

Opting for the Flat-Rate Withholding Tax (Prélèvement Libératoire)

As a micro-entrepreneur, you can choose to pay your income tax and social charges together via a single monthly or quarterly flat-rate payment, provided you meet the income conditions.

Eligibility:

Your household’s taxable reference income (RFR) for the second-to-last year must not exceed:

  • €28,797 for a single person

  • €57,594 for a couple (no children)

  • €71,992.50 for a couple with one child

  • €86,391 for a couple with two children

If your RFR exceeds these thresholds, you cannot opt for the flat-rate tax.

Flat Tax Rates:

  • Sales of goods/food items: 1% of turnover

  • Service providers (BIC): 1.7%

  • Liberal professionals (BNC): 2.2%

These rates apply to income tax only.

Social Contribution Rates (added on top):

  • Commercial sales: 12.3%

  • Service activities (BIC): 21.2%

  • Liberal professionals:

    • 23.2% (if affiliated with Cipav)

    • 24.6% (if not affiliated with Cipav)

Turnover Reporting and Payment

You must declare your monthly or quarterly turnover at autoentrepreneur.urssaf.fr, depending on your reporting frequency.

👉 Even with zero revenue, you are required to file a declaration (indicating €0) to remain compliant.

Declaring Your Choice for the Flat-Rate Tax Option

To opt in:

  • Existing micro-entrepreneurs: before 30 September of the year preceding the tax year concerned (e.g. by 30 Sept. 2024 for 2025 income).

  • New businesses: within three months following the month of registration.

This option must be declared to Urssaf or your local social fund.

Once opted in, you still need to complete the 2042-C Pro form by reporting your turnover in the section:
“Micro-entrepreneurs who have opted for the flat-rate withholding of income tax.”

⚠ Important

If you choose the flat-rate option, adjust your regular tax prepayment (acompte) accordingly via your online account on impots.gouv.fr, to avoid double payments.