The easiest way to work as a freelancer in France is to set up a micro-entreprise. But what exactly is this legal status? How does a micro-entreprise work? What is the taxation system and what are the tax rates? This article offers a simple definition of a micro-entreprise, explain how it works and what are the obligations so you can work in peace as a freelancer in France!
Work freelance in France : the micro-entreprise regime
Definition: a micro-entreprise is a sole-trading business allowing you to work as a freelancer in France with a simplified social and taxation regime. The main characteristics of this status are:
- You don’t have a lot of paperwork to do : registering and paying tax is way easier than with other kinds of company.
- There is no time limit: you can work as a freelancer in France with this status as long as you want.
- The micro-entreprise status has maximum turnovers.
Maximum turnovers for micro-entreprises
The maximum turnover is a limit that your profits must not exceed if you want to continue working as a freelancer in France under this legal status.
Micro-entreprises are subject turnover ceilings. The maximum turnover will vary depending on what kind of activity your business is based on.
Here are the pre-tax turnovers you have to stay below:
- 170 000€ if you sell goods
- 70 000€ if you sell services
- 70 000€ for liberal professionals
Now, let’s see what are your obligations if you work as a freelancer in France with the micro-entrepreneur status.
Work as a freelance in France : micro-entrepreneur legal duties
Even if they are simple, setting up a micro-entreprise to work as a freelancer in France includes some obligations.
- You need a separate bank account for your business (but it doesn’t need to be a business account).
- You need to keep track of your receipts in an receipt record (cahier de recettes.
- Declare your receipts every month or quarterly.
- Keep all your expenses bills.
- Put this compulsory indication on your invoices : Exonéré de TVA, art. 293-B du CGI. It means that you are exempted for VAT (Value Added Tax). This indication is allowed only if you don’t exceed VAT exemption thresholds.
Charges and tax for micro-entrepreneurs
Social security charges for a freelance in France
Social charges are calculated on a percentage of your earnings. Since 01/01/2018, the name of the government agency that collects contributions and provides benefits to freelancers in France is Sécurité Sociale Indépendants (self-employed social security).
Tax for a freelance in France
As a micro-entrepreneur, you have two options for the computation of your tax:
- It can be a percentage of your earnings
- Or you can choose to declare your incomes when you fill in your personal income tax return. If you do that, the rates for personal income tax will apply to your business earnings. However, the concept of income doesn’t apply to the micro-entreprise status, so your tax will be calculated on your business revenues with the deduction of a lump-sump allowance (see last column of the table below).
| Activity type | Social charges | Social charges with ACCRE (3 first years) | Tax rate if percentage of your earnings (versement libératoire) | Lump-sump allowance |
| Sale of goods | 12.80% | 3,20% / 6,40% / 9,50% | 1% | 71% |
| Sale of service | 22.00% | 5,50% / 11,00% / 16,50% | 1.7% | 50% |
| Liberal professional | 22.00% | 5,50% / 11,00% / 16,50% | 2.2% | 34% |
How to validate quarters for your pension
In France, in order to validate his quarters and contribute for his pension, the owner of a micro-entreprise has a minimum revenue turnover to reach.
| Activity type | Minimum sales revenue for 1 quarter a year | Minimum sales revenue for 2 quarters a year | Minimum sales revenue for 3 quarters a year | Minimum sales revenue for 4 quarters a year |
| Sale of goods | 3 510 € | 6 305 € | 9 120 € | 20 195 € |
| Sale of service | 2 020 € | 3 635 € | 5 245 € | 11 715 € |
| Liberal professional | 2 320 € | 4 190 € | 6 090 € | 8 875 € |
The Corporate Property Tax (Cotisation Foncière des Entreprises) for a freelancer in France
Like every French company, micro-entreprises must pay Corporate Property Tax (Cotisation Foncière des Entreprises, C.F.E.). It’s a local tax due every year in December, except the year of foundation of your company. The rates for Corporate Property Tax vary depending on your municipality.
VAT for a freelancer in France
When you create a micro-entreprise you’ll be granted a VAT exemption. But be careful: if your sales revenue exceeds a certain amount, you’ll be required to apply VAT on your invoices and the purchases you do for your company.
Here are the threshold values above which you must register for VAT
- 82 800€ for sales of goods
- 33 200€ for sales of services and liberal professionals
How can I know if micro-entreprise is the right status for me?
In order to choose the right legal status for your freelance business in France, you need to make a business and financial plan. Among other things, the aim of a business plan is to estimate your costs and how much money you’ll need to start running your business.
Since we know starting from scratch is complicated, we created a free business plan templates to download. We wish you success with your entrepreneurial venture and hope we’ve been useful!
We also have other articles about french companies :
If you want to know more about choosing the right legal status in France.
If you want to learn how to create a limited liability company in France