I’ve blogged in the past about Auto Entrepreneur as a great way to start a new small business in France, you only pay tax on your receipts, without any fixed costs like some regimes.
I recently received an unexpected tax demand for Tax Professionelle (or rather Cotosation Fonciere Des Entreprises – CFE). I knew when starting the programming business that I was exempt from tax professionelle for the two years following the year of creation (2009 in my case). After a quick visit to the tax office this morning to question the bill, it turns out that it was sent in error, and has been cancelled for this year (2011).
I will need to pay from next year – but the bit that surprised me was that the bill is NOT based on your revenue. It is based on the number of employees, your company assets and the location of the business. The lady in the tax office confirmed that if your sales are very low, then it is entirely possible to be out of pocket at the end of the year.
Not much of an incentive to become an entrepreneur !
A word of warning to anyone running an Auto Entrepreneur who receives a Tax Proffesionelle (aka CFE) bill, check the date you started your business and if you have very low revenues, then it might not be worth it.
NOTE – I am not a lawyer or tax professional, so this does not constitute advice and you should seek professional advice.
Good luck.
Hi Ian,
It’s curious because they need encourage people to become an entrepreneur these days, not otherwise.
Here in Brazil we have a system called MEI where people have to pay only 30 Reais (about 12,5 Euros) a month. You don’t have to pay any extra taxes.
It works. We have 1.5 million people participating.
The bad thing is there’s a small number of jobs able to join it. Programming business is not included, for example.
It’s nice to hear how other countries deal with getting small businesses off the ground.
The Auto Entrepreneur system here is very popular, several hundred thousand people have taken up the offer. The flat rate low tax rate payable on income is fine with me.
It just seems a little crazy to have an extra business tax not based on income or profit.
By the way – Tax Professionelle is on average around 300 euros per year.
I think there has been some pressure from the Artisans who feel that they are being undercut by AE businesses. But they should not fear us as they can reclaim 19.6% value added sales tax (TVA) and AE owners can not.