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End of Auto Entrepreneur?


Keni
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Has anyone heard this?

I was told by a friend in France that the French Government is looking to close the Auto Entrepreneur status in a couple of months.

I was given the information that they had now 'sucked' in over 200,000 new businesses that were previously believed to be 'on the black' and now are looking at them all having to become Micro Bics'. This is to ensure the government will continue to get the tax and cotisations.

Any news from anywhere please?
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This wouldn't surprise me in the least as AE was conceived as method of allowing French citizens to legitimately earn additional income and I don't suppose it even occurred to the legislators that it would double as a cheap and easy entry to the health system for immigrants or others not otherwise entitled.

It would be very interesting to see any statistics for the split between French AE's and immigrant.

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The French government, via the APCE site and others, has just clarified the status of auto-entrepreneurs who may still be declaring nil revenues, and consequently not paying any tax or social contributions. The latest ruling is that you can remain an auto-entrepreneur in this situation for three years, or twelve consecutive 3-montly periods. At the end of this period and with nil income, your auto-entrepreneur status would automatically lapse.

It has to be borne in mind that new auto-entrepreneurs have been entering the system throughout 2009 - not everyone registered way back in January of last year and liberal professions had to wait until March or April - so many are still in the process of setting-up their business and finding their first customers. I have seen no reports of any changes planned or contemplated, and the French www.auto-entrepreneur.fr site is usually the first to announce any change of policy.  

With regard to the auto-entrepreneur system pulling in people otherwise working 'on the black', as I have reported on another forum, this is not the problem. Fiscal fraud in France accounts is estimated at 15% and is largely due to under-declaration of receipts (ie taking payments in cash) by 'legitimate' businesses, and cited among the worst offenders were artisans, garages, removal firms, dentists, fashion boutiques, cosmetic surgeons and psycho-analysts.  

Cordinally, P-D de R.

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That offenders list is fascinating, Peter - interesting that it contains three professions in the medical field (dentists, cosmetic surgeons and trick cyclists) - amazing that people are prepared to trust them enough to pay them "under the table" - what happens when things go wrong? - one is bound to wonder.

I suspect, although I do not know, that the immigrant take up of AE is somewhat smaller, in percentage terms, than one might imagine, ANO, from our somewhat limited experience of the scheme.  Yes, it does seem a good back door to health provision here but I do wonder just how many people really do have the determination to register properly - I suspect far more expats just "wing it" on the health front, than we think.  (One only has to look at some of the posts in the health section of ANOther forum, to realise this....[Www])

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Why would the AE system have been conceived as a method of allowing only French citizens to legitimately earn additional income, given that anyone who is legally resident in France has the right to employment or to create an enterprise? 

I'm sure the legislators will have been fully aware of the opportunities for a cheap and easy entry to the health system for immigrants.....[;-)]

 

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I wouldn't give any credence to a report about 'fiscal fraud' in France.

It's those who are honest and up front with their tax declarations that get accused of fiddling, and receive demands for extra tax payments. The real black marketeers, of which there are plenty, get away with it.

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[quote user="Keni "]Has anyone heard this? I was told by a friend in France that the French Government is looking to close the Auto Entrepreneur status in a couple of months. I was given the information that they had now 'sucked' in over 200,000 new businesses that were previously believed to be 'on the black' and now are looking at them all having to become Micro Bics'. This is to ensure the government will continue to get the tax and cotisations. Any news from anywhere please?[/quote]

Well A-E has been up and running a year now and the government are once again promoting it, they say that 320000 new businesses started in the last recessionary year, up by 75% from the year before, or 65% according to which news programme you watch, thanks to A-E.

I have heard the rumours that you speak of and they are exactly that, propogated by local companies that are beginning to lose some of their overpriced devi's to  leaner hungrier smaller enterprises. 

In the past they controlled the black economy by either reporting any ex-employees working on the black or giving the yes/no to employees asking for their permission to do work during their weekends or holidays.

Now the self same employees are free to work in competition in their free time.

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  • 3 weeks later...
I keep seeing the reference to cheap access to the health system with AE, if you check it out, you do not qualify for health care if your turnover is below a certain amount.

Personally I think AE is a fantastic idea, it provides so much opportunity for so many, now a retired person who may want to do a little gardening etc in the summer to supplement their income can do so, it goes a long way to replace the antiquated check employ.

I think it also addresses many issues regarding black traders, everyone presumes the black traders are people who blatantly flaunt the law for the sake of it, for most its probably the fear of entering a system where their tax and social fees outweigh what they may earn, with AE they can now enter the system with the security of knowing if they dint earn they dint pay.

I think its a master stroke on the part of the French government, once people enter the system with AE they can give their business a go, if it is a success then they will soon have to upgrade to self employed, but at least by that time they have gone some way to establish themselves and see if they can make a living at it.

I know about 12 people who have registered since it started who, if AE didn't exist would have been to afraid to enter the system, for some it allows them to do some work just in the summer months as an extra, for others its allowed them to start their business with piece of mind, at least 4 of those is doing so well that they will upgrade next year.

all in all its a lot of things to a lot of people.
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[quote user="MedievalCastle"]I keep seeing the reference to cheap access to the health system with AE, if you check it out, you do not qualify for health care if your turnover is below a certain amount.[/quote]

Can you post your source for this please? What is the minimum turnover then??
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[quote user="MedievalCastle"]I keep seeing the reference to cheap access to the health system with AE, if you check it out, you do not qualify for health care if your turnover is below a certain amount.[/quote]

I think this is another urban myth. I've seen no reference to this in any AE documents. In addition you refer to turnover limits in any two months - how would they know, many report turnover quarterly ? I have heard of a number of AE's (my OH included) who are in the early stages of their business with low turnover who are fully registered in the health system.

I believe that many think this is what should happen (i.e. a turnover limit before qualifying) and therefore they project this belief into a fact. I don't see this is any different to any low earning business/employee making small contributions being admitted to the system.

I'd put money on your wife's accountant being unable to point to any legislation about this apart from the 3 year rule.

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[quote user="MedievalCastle"] I think its a master stroke on the part of the French government, once people enter the system with AE they can give their business a go, [/quote]

I fail to see this as a "master stroke", all they are doing is the same as the UK, where you pay tax and N.I based on your profit.

The French government should be ashamed at the way it treats its citizens regarding earning money. No wonder they (mostly) just don't bother even to try.

Working is not a privilege granted by the government, it is a persons RIGHT.
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[quote user="cooperlola"]That offenders list is fascinating, Peter - interesting that it contains three professions in the medical field (dentists, cosmetic surgeons and trick cyclists) - amazing that people are prepared to trust them enough to pay them "under the table" - what happens when things go wrong? - one is bound to wonder.

[/quote]

Coops, it may not be "under the table" but just payments by cash.  many old people still do not use cards in rural France,  When I went to a specialist recently I had to pay 28€ they didn't have a card machine so it was cash or cheque, and since my local dentist retired and I am trying different ones some of those wanted cash or cheques, so it might not be the client who are complicite in any under reporting of receipts, then there was my roofer who would do 10% discount for cash.........[Www]

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Tax avoidance/evasion is a national obsession in France isn't it ?

When it comes to most professional jobs you can nearly always get a 'cash' price. My car is in one of the main agent garages for a bit of body repair work (don't ask !) and the difference between an official job with a factura and cash was €295 so no prizes for guessing which I've gone for [blink]

Ask me if I feel guilty [;-)]

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[quote user="AnOther"]

Tax avoidance/evasion is a national obsession in France isn't it ?

[/quote]

Quite probably. There is a semi-official asumption in official circles that everybody is on the fiddle. The effect is that those whose income is not particularly large come under suspicion (because they must be under-declaring their income or over-stating their costs). Whereas those who are able to defraud the system on a large scale or who don't bother to declare anything at all escape the spotlight.

French tax officers with their inflation-proof salaries, light workload and endless congés probably do regard some of us with suspicion. From where they are coming from we must appear pretty daft to work so hard, so long and for so little tangible reward.

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[quote user="greyman"][quote user="MedievalCastle"]I keep seeing the reference to cheap access to the health system with AE, if you check it out, you do not qualify for health care if your turnover is below a certain amount.[/quote]

I think this is another urban myth. I've seen no reference to this in any AE documents. In addition you refer to turnover limits in any two months - how would they know, many report turnover quarterly ? I have heard of a number of AE's (my OH included) who are in the early stages of their business with low turnover who are fully registered in the health system.

I believe that many think this is what should happen (i.e. a turnover limit before qualifying) and therefore they project this belief into a fact. I don't see this is any different to any low earning business/employee making small contributions being admitted to the system.

I'd put money on your wife's accountant being unable to point to any legislation about this apart from the 3 year rule.

[/quote]

Hi Greyman, this is not bar room advice with someone "projecting it to truth" its fro a pucker French accountant! we have left a message at his office for him to ring us back to confirm and also hopefully provide a link to information, but you are welcome to his telephone number, or you can visit a accountant near you.

To be honest the alternative seems far less likely, so are you suggesting that someone can register for AE, never do any work or put anything through and automatically be in the health care system?
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"To be honest the alternative seems far less likely, so are you suggesting that someone can register for AE, never do any work or put anything through and automatically be in the health care system?"

If you replace "can" with "have been able to" in the above quote, you have got the picture.[;-)] 

The idea which came from the previous president and it was "to plant acorns from which trees would grow".  To do that Chirac recognised that the main obstacle to starting a business was the charges that had to be paid up front irrespective of income.  The idea was these AE would grow and employ people etc and become SARLs, I remember the press coverage of it I think it was in Lyon when Chirac launched the idea.  What then happened was some immigrants from within the EU who were not entitled to health care after 11/07 found that by starting an AE they could get into the health system that way.  That loophole may, as forecast for some time now, be being closed.

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Unfortunately 'pukka French accountants' do not always give advice that is correct, valid, and comes from any traceable source - which makes it very difficult to prove that they gave that advice. The same applies to government officials who, if they don't know the answer, will often make something up.

The autoentrepreneur regime was never intended by its promoters as a cheap and easy way into the French system. The initial PR material made it clear that those who were already in the health and social security system, through being salaried, unemployed, students etc, were those who would be able to benefit. Autoentrepreneur registration was meant to lapse if you had gone a year without making a declaration (though no minimum amount of declaration was ever specified). But I think even that might have since been relaxed.

Things are not helped by the state of general ignorance among some officials in URSSAF, RSI etc who have little or no knowledge of the autoentrepreneur regime. I have read elsewhere that this is most likely down to lack of proper training.

Frankly if the loophole was to be closed, I would have expected it to have been done so by now.

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[quote user="AnOther"]

Tax avoidance/evasion is a national obsession in France isn't it ?

When it comes to most professional jobs you can nearly always get a 'cash' price. My car is in one of the main agent garages for a bit of body repair work (don't ask !) and the difference between an official job with a factura and cash was €295 so no prizes for guessing which I've gone for [blink]

Ask me if I feel guilty [;-)]

[/quote]

"Let's call a spade a spade, this gentleman, and many others like him, take up token foreign residencies to avoid paying tax, nothing more nothing less".
Does this comment ring a bell ???? [Www]

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[quote user="MedievalCastle"]

To be honest the alternative seems far less likely, so are you suggesting that someone can register for AE, never do any work or put anything through and automatically be in the health care system?[/quote]

Well that's exactly how it is, up to 3 years at present. I know of people who have registered AE, have an attestation from RSI, are receiving French state funded health services and have never posted any turnover. As the law stands after 3 years of NIL returns they will be switched back to microBIC I believe but that is the only sanction at present. This isn't to say this won't change again but the 3 year has only recently been announced and was well publicised so I don't believe a more significant change would have been made with nobody noticing.

Your accountant may be pukka but my experience of French accountants is that they're not the hottest in providing business advice, they're more like form fillers. The one I consulted last year had not heard of AE (2 months after it's launch) and advised my wife to set up a SARL at a cost of 2,000€ with 130€ per month accounting charges ! Unless this one can provide a definitive source I wouldn't trust his advice.

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[quote user="Will"]Unfortunately 'pukka French accountants' do not always give advice that is correct, valid, and comes from any traceable source - which makes it very difficult to prove that they gave that advice. The same applies to government officials who, if they don't know the answer, will often make something up.

The autoentrepreneur regime was never intended by its promoters as a cheap and easy way into the French system. The initial PR material made it clear that those who were already in the health and social security system, through being salaried, unemployed, students etc, were those who would be able to benefit. Autoentrepreneur registration was meant to lapse if you had gone a year without making a declaration (though no minimum amount of declaration was ever specified). But I think even that might have since been relaxed.

Things are not helped by the state of general ignorance among some officials in URSSAF, RSI etc who have little or no knowledge of the autoentrepreneur regime. I have read elsewhere that this is most likely down to lack of proper training.

Frankly if the loophole was to be closed, I would have expected it to have been done so by now.

[/quote]

Sorry Will what was i thinking! I have experienced exactly the same thing with government officials giving incorrect advice, pehaps its my ignorance in thinking my accountant actually knows what he is talking about, thinking about it now and after your and greymans comments i should have known better!

Sorry guys i hold my hands up!

My wife is checking the AE website as we speak. When he rings this afternoon I will insist on where this information can be confirmed and if he cant give that to me, then you are correct, I suspect you are correct anyway.

What was i thinking :) thats because my accountant in the UK used to be so good, but true, we are in france.

As soon as he gets back to me i will post to either confirm or denie if he provides proof.

this now leads me to a question if i may, my wife is on micro enterprize, the above being correct she would be far better off on AE, the question is, would it be better for her to stop tading as MEnt then start a new AE a couple of weeks later? or to convert from MEnt to AE? is there any difference/advantages? she as been on MEnt for approx 5yrs
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