Business owners in France who use the micro-entreprise tax regime are liable for social insurance contributions on a fixed rate basis as a percentage of their turnover (not profit).
The level of the fixed rate depends on the nature of the business, whether commercial, trade or one of the liberal professions.
Under proposals announced by the government these fixed rates are to be reduced.
The table below shows the current contributions and the new rates that will apply.
Sales/Trading | 12.80% | 12.30% |
Services/Artisans | 22.00% | 21.20% |
Professional | 22.0% | 21.10% |
CIPAV affiliated liberal professionals will pay at the rate of 21.20%
There are similar reductions for those business owners (including those who run an agricultural business) who use the standard profit and loss accounting system of régime réel and whose income is at or lower than the national working wage - 'SMIC'. The reduction will be up to €500 a year depending on income, to be applied on cotisations for health and maternity cover. Indeed, business owners earning around the minimum working wage may no longer pay health/maternity contributions.
The proposal by the government forms part of a wide range of measures currently winding their way through the French parliament to deal with the cost-of -living crisis, in a proposed new law called the loi pour le pouvoir d'achat.
Accordingly, until it has been enacted it cannot be confirmed, although the chances of it not passing are slim. UPDATE Nov 2022. These rates have now been confirmed.
The implementation date for the measure is anticipated to be as early as 1st October 2022, so that contributions for the period October to December 2022 will be based on the new rates.
Other measures in the pouvoir d'achat draft law include a continuation of the 4% ceiling on electricity price rises, giving France the lowest price rises in Europe.
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