Before being able to file your tax returns, you need to know your company’s tax regime. You have three at your disposal:
- the micro-enterprise regime (le régime de la micro-entreprise),
- the real regime (le régime réel),
- the controlled declaration regime (le régime de la déclaration contrôlée);
The micro-enterprise regime
Micro-entrepreneurs, by default, belong to the micro-tax regime. This means you if, in the last 12 months, you earned less than:
- €77,700 for service activities belonging to Industrial and Commercial Profits (Biens Industriels et Commerciaux or BIC in French) and liberal professionals who fall under Non-Commercial Profits (Biens Non Commerciaux or BNC in French), and;
- €188,700 for trade and rental companies.
If you are eligible, you can also opt for income tax withholding. This modifies how your taxes are calculated. In particular, it allows you to pay your income tax and mandatory social security contributions simultaneously.
Real tax regimes
All companies earning more than the micro-enterprise thresholds above automatically belong to the real regime.
- Service provider companies with an income between €77,700 and €264,000 and trade or rental companies with revenue ranging from €188,700 to €876,000 fall under the real simplified regime.
- Service companies earning more than €264,000 in revenue and trade and rental companies earning more than €876,000 annually fall under the normal real regime.
The controlled declaration regime
What if you’re a liberal professional who earned over €77,700? Companies whose profits fall under Non-Commercial Profits (BNC in French) and earn over €77,700 before tax mandatorily belong to the controlled declaration regime. Here, the tax office looks not so much at the total revenue made but rather at how much profit was generated. This is then used to calculate what taxes are owed.