TLDR: Micro-entrepreneurs can benefit from several types of exemptions, including the versement libératoire (flat-rate income tax payment), territorial exemptions for new businesses in specific zones, and CFE (cotisation foncière des entreprises) exemptions for certain categories of artists and authors. These exemptions are subject to strict conditions and often require a specific application.
Flat-rate income tax payment (versement libératoire)
The flat-rate income tax payment allows micro-entrepreneurs to pay a fixed tax on their turnover instead of progressive income tax. To qualify, sole proprietors must meet the following conditions:
- The reference tax income of the tax household (year N-2) must not exceed, per family quotient share, the upper limit of the second bracket of the income tax scale for the previous year (N-1).
- They must be subject to the micro-social regime.
The reference income is calculated before the flat-rate deduction (71%, 50%, or 34% depending on the activity).
Territorial exemptions for new businesses
Micro-entrepreneurs who start a business in specific zones may qualify for territorial exemptions. These zones include:
- Urban Free Zones (ZFU), where exemptions may apply to the cotisation foncière des entreprises (CFE) and, in some cases, income tax for a limited period.
- Employment Basins to Revitalize (BER), offering temporary exemptions for new businesses.
- Priority Development Zones (ZDP), where exemptions are linked to job creation or investments.
To benefit from these exemptions, the option must be declared when filing the CFE return for the year in which the exemption is requested.
CFE exemptions for specific categories
Certain categories of micro-entrepreneurs are exempt from the cotisation foncière des entreprises (CFE):
- Visual and graphic artists who sell only their own original works of art.
- Photographer-authors, limited to the transfer of artistic photographic works.
- Literary, musical, or choreographic authors, excluding software authors.
These exemptions are automatic if legal conditions are met, without the need for a specific application, except for categories that must declare exempt revenue in their tax return.
Limits and exclusions of exemptions
Not all micro-businesses qualify for exemptions. In particular:
- Self-employed workers who opt out of the micro-social regime lose the right to the flat-rate tax payment.
- Territorial exemptions do not apply in cases of change of ownership or takeover of an existing business.
Additionally, CFE exemptions for artists and authors do not cover activities other than the sale of works of art or the assignment of copyright.
Procedure for CFE exemptions
For territorial exemptions (e.g., ZFU, BER, ZDP), the request must be submitted when filing the CFE return for the first year for which the exemption is sought. No specific form is required beyond the CFE return itself, where the exemption option must be indicated.