ENT1-A1. The different types of companies in France, and their taxation
TIMING/LENGTH (IN MINUTES): 30’
DESCRIPTION
In this activity, you will learn about the different forms of companies in France, their legal status and taxation.
When an entrepreneur wants to start his business, he is confronted with the choice of the structure to be created.
Different forms of companies exist in France. It is necessary to know them in order to choose the right structure according to the type of activity.
DEVELOPMENT/ METHODOLOGY
Different legal statuses:
–The category of “entreprises individuelles” (sole proprietorships): It consists of a single manager, namely the contractor.
Different types: “Entreprise Individuelle” (sole proprietorships) ou “Entreprise Individuelle à Responsabilité Limitée” (Sole Proprietorship with Limited Liability). These legal forms has a particularity. In fact, the debts of the company are the debts of the manager.
Other type: self-employment, which is now called microenterprise.
- category of companies: you have to choose between the legal form of the SARL (or EURL), the SAS (or SASU) or the SA, or SNC (General partnership).
Depending on the form chosen, taxation is not the same.
Different types of taxation:
1- Taxation of profits
For sole proprietorships (craftsmen, tradesmen), the liberal professions and EURLs (one-man businesses with limited liability) are automatically subject to Income Tax.
Depending on the legal form chosen, tax rates and profit calculation vary.
2- VAT:
Generally speaking, it is companies that collect Value Added Tax on behalf of the State: they invoice it to their customers and then remit it to the State, after deducting the VAT that they themselves have paid on purchases or investments. This is known as collected or deductible VAT.
More information and details can be found on this web page: https://www.jesuisentrepreneur.fr/statut-juridique/quels-impots-taxes-entreprise-selon-statut.html
3- The CET:
The territorial economic contribution (CET) is made up of the land contribution of companies (CFE) and the contribution on the added value of companies (CVAE).
Its amount is determined by the local authorities where the business are located (according to the rental value of the real estate subject to property tax).
Entrepreneurship:
1- Le statut:
The auto entrepreneur is an individual entrepreneur created in 2009. A self-employed person is any self-employed activity whose annual turnover must not exceed a certain ceiling. This scheme was designed to allow any person to exercise a commercial, craft or liberal activity.
Since January 1, 2016, the self-entrepreneurial scheme and the microenterprise have been grouped under a single status called micro-entrepreneur. This new status was created to encourage and simplify the creation of a sole proprietorship.
For more information: http://bloginfluent.fr/taxes-auto-entrepreneur/
2- Taxation:
Entrepreneurs, in addition to their social charges, must pay various taxes and fees:
The CFE (Cotisation Foncière des Entreprises): the amount of this tax varies according to the rental value of the real estate used by the Self-Enterprise.
The entrepreneur is exempt from this tax in the first year of its creation.
La CFP (Contribution to Vocational Training): the finance law of 2011 obliges auto-entrepreneurs to pay a contribution to enable them to have effective access to training.
The consular chamber fee (TFC): this is a tax that helps finance chambers of commerce and chambers of trade and crafts; it corresponds to a percentage of declared revenues. Also, entrepreneurs are compulsorily subject to income tax.