Once you got your business up and running, you worked hard to make it a success, and all that effort is beginning to pay off. You’ve grown your client base and your turnover is increasing every quarter. Excellent news!
Don’t forget, though, that the advantages of the micro-enterprise status are only open to you if your earnings stay below a certain revenue threshold. In 2023, 2024, and 2025, that threshold stands at:
- €188,700 of annual revenue excluding VAT for sales and manufacturing activities,
- €77,700 of annual revenue excluding VAT for businesses operating within the professional services industry.
If you go over your threshold, you automatically forfeit the advantages afforded to you by the micro-enterprise status, and you are obliged to opt for a different company structure, such as EI, SASU or EURL (more on these later).
That said, there is a small window of tolerance, which many people don’t know about, but which can be beneficial for micro-enterprises that are experiencing a temporary increase in activity. You can exceed your revenue limit for one calendar year without losing your fiscal benefits the following year. But the tolerance wears off if you exceed the limit for a second consecutive year.
Let’s take a look at an example to try to make sense of this:
Let’s imagine you are a freelance illustrator operating as a micro-enterprise. You trade within the professional services industry, so your annual revenue must not exceed €77,700 excluding VAT, in line with the thresholds set by law.
In 2021, your business really took off and you turned over €80,000. The tax organization’s tolerance means you can continue to benefit from micro-enterprise status throughout 2022.
Now, let’s take a look at the two possibilities you have:
If in 2022, your turnover was €65,000 (below the legal threshold), you can continue to benefit from micro-enterprise status in 2023.
Or, let’s assume that in 2022, your revenue continued to grow and reached €90,000, which is now the second time you’ve gone over the micro-enterprise threshold. You therefore lose the advantages of this status in 2023 as the tax service does not allow you to exceed the threshold for two consecutive years.