Axation and Enterprises: Your Deals Now

A micro-enterprise may be subject to VAT following an overrun of the ceilings of the deductible based on VAT, or on the voluntary option of the micro-entrepreneur for the payment of VAT.

Liability following the exceeding of the thresholds for the exemption based on VAT

As we mentioned above, a micro-enterprise may be subject to VAT if the thresholds for the exemption on the basis of VAT are crossed.

From the 1st day of the following year (exceeding within the limit of the increased thresholds) or from the 1st day of the month of exceeding (exceeding of the increased thresholds), the micro-enterprise is subject to VAT and depends on the actual regime simplified. Therefore, the micro-entrepreneur:

  • Must collect VAT from its customers.
  • And can deduct VAT on purchases of goods and services.

The micro-enterprise subject to VAT must collect VAT from customers. As such, several information must be indicated on the invoices, among which:

  • VAT identification number
  • The legally applicable VAT rate and the corresponding amount of VAT
  • The total amount to be paid excluding taxes (HT) and all taxes included (TTC)

Tax liability by option for the payment of the micro-entrepreneur’s VAT

A micro-enterprise can also be subject to VAT on option. Thus, the micro-entrepreneur voluntarily opts for the payment of VAT. Use the tax return estimator is important for understanding a better option.

This option is possible even if the turnover does not exceed the thresholds for the deductible based on VAT.

The basis for calculating the CSG on income from activities is the same as that subject to social contributions. For the business manager, this activity income corresponds in particular to:

  • Remuneration, benefits in kind and all indemnities subject to social contributions,
  • Professional income of self-employed workers (BIC, BNC, etc.).

A reduction representative of professional expenses of 1.75% is applied to income from activity to obtain the basis for calculating the CSG. This allowance does not apply to income exceeding 4 times the social security ceiling. The CSG is calculated here at the rate of 9.20% on the amount of earned income (after application of the possible allowance). The CSG paid on income from activity is deductible from the overall taxable income up to 6.80%.

The CSG deductible on the manager’s dividends

First of all, we remind you of the terms of application of the CSG on dividends. Next, we explain the rules for deducting the CSG paid on dividends.

The application of the CSG on dividends

For the company director affiliated to the general social security scheme: social security contributions on income from movable capital, calculated at the rate of 17.20%, apply to the entire amount of the gross dividend.

For the company director affiliated to the social security scheme for the self-employed:

Social security deductions on income from movable capital (17.20%) apply to the share of the gross amount of dividends which does not exceed 10% of the following total: share capital + share premiums + amounts paid in partner current account. The CSG is calculated here at the rate of 9.90% on the gross amount of dividends.

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