Auto-Entrepreneur changes proposed by government review

02 January 2014

Key points about this news item Auto-Entrepreneur changes proposed by government review

Auto-Entrepreneur scheme in France


Proposed Auto-Entrepreneur changes announced

Ever since its inception, the Auto-Entrepreneur (AE) regime has been under attack from all sides, except those that signed up to the scheme.  In essence, it was designed to make the process of registering a small business or start-up far simpler and less costly.


Instead of being forced to pay cotisations even before the business had earned a single cent, the charges were based on actual income.  Registration was all online as were the quarterly tax returns and tax payments are taken directly from your bank account.


Of course, there were limitations, such as not being able to claim any form of expenses, but the regime was ideal for many and also allowed the registered person access to health and other social security benefits.


During the summer of 2013, changes were proposed by Sylvia Pinel that managed to upset everyone, both pro or anti the AE regime!  Quite an achievement!  The uncertainty created, including the possibility of the AE disappearing altogether caused a ten percent fall in AE registrations.  To try and alleviate the uproar, the government commissioned a review, led by Laurent Granguillaume, MP for Cote d’Or.


The report has now been presented to government and here are some of the proposals;


  • Change the entreprise individuelle regime to a format similar to AE, creating a unique legal status
  • Allow AE’s to register under a choice of fiscal regimes;
    • Taxed on turnover – flat rate scheme based on sales and no allowance for expenses
    • Taxed on profit – taxed on profit and deduction of expenses allowed
    • Proposal to limit AE registration to two or three years has been dropped
    • Proposed reduction in turnover limits would be dropped
    • A review of the turnover limit required to qualify for access to social security benefits with an option to pay extra to qualify
    • Better advice for AE’s when they reach the turnover limit that requires them to register under another regime


It is clear that a simple system such as AE is required in France, to allow small business to grow without the crippling overheads of the other regimes.  AE has been very popular, most likely thanks to the access to free health, pension, sickness and other benefits, but has drawn strong criticism from artisans and Chambre de Métiers.


Are you an AE in France?  What are your views on the proposed changes?  Leave your comments below.






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