TLDR: The simplified actual regime lightens the accounting and declarative obligations for small and medium-sized businesses, while maintaining taxation based on actual profit. The differences concern the keeping of accounts, stock valuation, expense receipts, and the documents to be attached to the declaration. Switching between the two regimes is possible under certain conditions.
Common legal basis
Both regimes are based on the taxation of actual profit, in accordance with articles 53 A to 57 of the Code Général des Impôts (CGI). The simplified regime applies specific simplification measures without challenging this principle.
Simplified accounting obligations
In the simplified actual regime, accounting can be simplified:
- Daily recording of only receipts and payments.
- Recognition of receivables and liabilities at the close of the financial year, except for general expenses paid at regular intervals (periodicity ≤ 1 year).
- Valuation of stocks at cost price or at the day's rate at the close if lower than the cost. A flat-rate evaluation is possible, except for raw materials purchased and advances to crops.
- Flat-rate recording of fuel expenses for professional travel according to an annual scale.
- Exemption from justification of incidental general expenses paid in cash, up to a limit of 1‰ of the turnover achieved and a minimum of 152 €.
Declaration of results
Companies under the simplified actual regime declare their results annually, as in the normal actual regime, but with simplified documents:
- A simplified account showing the tax result.
- A table of fixed assets and depreciation.
- A simplified balance sheet to support the declaration.
Certain companies may benefit from a tax exemption from the balance sheet under certain conditions.
Switching between regimes
- Option for the normal actual regime: Companies in the simplified regime can opt for the normal actual regime by notifying the administration before February 1st of the first year of application.
- Automatic switch: If a company exceeds the turnover thresholds provided for the simplified regime, it automatically switches to the normal actual regime from the first financial year following the three-year period considered.
Shared characteristics
Both regimes tax actual profit, but the simplified regime reduces administrative constraints while respecting general accounting principles. The simplifications are a faculty, not an obligation.