Small Business Tax in France

France offers two distinct small-business tax tracks: the micro-entrepreneur (auto-entrepreneur) regime for sole traders, and corporate income tax (impot sur les societes, IS) for incorporated entities such as SARL and SAS. Both tracks interact with the local business tax (CFE) and require a SIRET registration number. This overview draws on figures published by the Direction Generale des Finances Publiques (DGFiP) and URSSAF as current for 2025.

For the broader French tax context see the France country overview.

What are the 2025 micro-entrepreneur turnover ceilings?

The micro-entrepreneur (formerly auto-entrepreneur) regime is available to unincorporated sole traders whose annual turnover (chiffre d'affaires, HT) does not exceed set ceilings. For 2023 to 2025 the DGFiP has confirmed two principal ceilings [SC1]:

• EUR 188,700 for the sale of goods, on-site consumption, and lodging (BIC commerce category)
• EUR 77,700 for service provision activities classified under BIC or BNC
• EUR 15,000 for non-classified furnished tourist rentals

For mixed-activity businesses the overall ceiling is EUR 188,700, with services limited to EUR 77,700 within that total. Exceeding a ceiling for one year does not immediately end the regime -- the entrepreneur retains micro status during that year. Exceeding the ceiling for two consecutive years triggers an automatic transition, from 1 January of the following year, to the standard real-accounting tax regime (regime reel) for BIC activities or the controlled-declaration regime for BNC [SC1].

What social charges apply on micro-entrepreneur turnover?

The micro-social scheme calculates URSSAF social contributions as a flat percentage of gross turnover, not net profit. Rates effective 2025/2026 as confirmed by the service-public.fr contribution guide [SC2]:

• 12.3% for sales-of-goods and BIC commerce activities (including on-site catering)
• 21.2% for commercial or craft service provision (BIC services) and furnished-dwelling rental
• 23.2% for liberal professions affiliated with CIPAV (the pension fund for liberal professions)
• 25.6% for liberal professions not affiliated with CIPAV (unregulated BNC)

If the turnover for a period is zero, no cotisations are due. Declarations are made monthly or quarterly via autoentrepreneur.urssaf.fr. The flat-rate-on-turnover approach is administratively simple but can be a disadvantage for businesses with high input costs because there is no deduction for expenses.

What is the versement liberatoire flat income-tax option?

Micro-entrepreneurs whose household revenu fiscal de reference (reference taxable income, N-2) falls below a per-part threshold may opt for the versement liberatoire de l'impot sur le revenu -- a flat income-tax payment collected alongside URSSAF cotisations each month or quarter, instead of the standard progressive IR schedule [SC3].

Flat versement liberatoire rates (applied to gross turnover):

• 1.0% for BIC commerce and goods-sales activities
• 1.7% for BIC services
• 2.2% for BNC (liberal professions)

Eligibility requires the household reference income from year N-2 to fall below approximately EUR 29,579 (single person, 1 fiscal part) -- thresholds are indexed annually [SC3]. Once the option is elected it applies for the full calendar year and must be renewed. The practical advantage is cash-flow certainty: income tax is settled in real time with each turnover declaration, removing the end-of-year lump-sum IR payment. The disadvantage is that the flat rate may exceed the standard progressive rate if annual net income is modest.

How does VAT franchise work for micro-entrepreneurs?

Micro-entrepreneurs below the franchise en base de TVA thresholds do not charge VAT on sales and cannot recover VAT on purchases. Per Article 293 B of the Code General des Impots, invoices must carry the note "TVA non applicable -- article 293 B du CGI" [SC4]. The 2025 thresholds confirmed by DGFiP and service-public.fr are:

• EUR 85,000 (tolerance EUR 93,500) for goods sales, catering, and accommodation
• EUR 37,500 (tolerance EUR 41,250) for services (BIC and BNC)

A business that exceeds the basic threshold but stays below the tolerance threshold retains the exemption for the rest of that year. Exceeding the tolerance threshold triggers immediate VAT registration. The proposed unified EUR 25,000 threshold for micro-entrepreneurs was rejected via law 2025-1316 and existing thresholds remain in force [SC4].

How is corporate tax (IS) calculated for small companies?

Incorporated entities -- SARL, SAS, EURL, SASU -- pay impot sur les societes (IS) under Article 219 of the Code General des Impots. The rate structure for qualifying small companies is confirmed by PwC France and the DGFiP [SC5]:

• 15% reduced rate on the first EUR 42,500 of taxable profit -- for companies with annual turnover not exceeding EUR 10 million and where at least 75% of fully paid-up share capital is held by individuals
• 25% standard rate on all profits above EUR 42,500 (and on all profits for companies that do not meet the reduced-rate conditions)

For a qualifying SME with EUR 100,000 taxable profit: first EUR 42,500 taxed at 15% = EUR 6,375; remaining EUR 57,500 taxed at 25% = EUR 14,375; total IS = EUR 20,750 (effective rate 20.75%). A company that does not qualify pays 25% on the full EUR 100,000 = EUR 25,000. The 25% standard rate has been stable since fiscal year 2022 following a progressive reduction from 33.33% under the 2018-2022 competitiveness reforms.

What is the CFE local business tax and the SIRET requirement?

Every business -- including micro-entrepreneurs -- that conducts a habitual, non-salaried, professional activity in France as of 1 January of the tax year is in principle subject to the Cotisation Fonciere des Entreprises (CFE), a local-authority tax based on the rental value of business premises [SC6]. Key rules:

• First year exemption: no CFE is due in the year the business is created, regardless of activity start date
• Permanent EUR 5,000 exemption: micro-entrepreneurs whose annual turnover does not exceed EUR 5,000 are permanently exempt from CFE for any year in which that threshold is not exceeded
• Initial declaration mandatory: Form 1447-C-SD must be filed by 31 December of the creation year via impots.gouv.fr, even when the first-year exemption applies
• Payment deadline: CFE is due by 15 December; businesses with a prior-year CFE exceeding EUR 3,000 must pay a 50% deposit between late May and mid-June

Registering as a micro-entrepreneur or company requires a SIRET number -- a 14-digit identifier issued by INSEE (the national statistics institute) composed of the 9-digit SIREN (entity identifier) plus a 5-digit NIC (establishment code). Registration is completed via the guichet unique (guichet-entreprises.fr) for companies or the autoentrepreneur.urssaf.fr portal for micro-entrepreneurs. Processing typically takes one to four weeks.

For personalised guidance on which regime fits your situation, consult a qualified tax professional -- specifically an expert-comptable registered with the Conseil National de l'Ordre des Experts-Comptables (CNOEC) or a conseil fiscal. Browse the France tax-pros directory to find a listed professional.