Cotisation questions

[Albert the InfoGipsy]

I'm planning on moving to France permanently, either in the next few months or in about three years time -- guess which I'd prefer?

If I move soon I'll transfer my IT freelance business into the French system so I'm trying to work out some scenarios for how much I'd actually keep based on a range of possible turnovers. I'm considering a portage, but need to see how much I'd earn as an entreprise individuelle instead.

I need a figure for cotisations as a percentage of profit. I've seen 45% quoted in this forum. The RSI web site seems to say that it drops to 26% for profits above €32,000. Can anyone confirm that it is always the same percentage no matter how much you earn, or are there bands or thresholds?

Tax is calculated on profit minus cotisations -- is this correct?

On another site I have seen the statement that if I don't use a centre de gestion I have my tax liability increased by 25%. Is this correct? Does it apply to a Micro BNC?

Finally, If I work for a few years and then stop before I qualify for my E121 how long would my health cover last before I have to take out private insurance?

Thanks for any advice.

[lmc]

Hi Albert

You don't say exactly what your IT activity is but you seem to think that you would be a BNC rather than a BIC so the % are considerably different. 

As a micro BNC you can take a maximum turnover of 27K .  An abattement of 34% will be applied to your turnover and you will be charged cotisations of 25% on the remainder.  Example: turnover = 27K, abattement = 9.18K, cotisations based on 27 - 9.18 = 17.82, cotisations = 17.82 x 25% = 4.46K.  This can work out very well for you if your real costs are well below the 34% allowed for them.

For a BNC réel (ie not a micro), your understanding of the RSI website is not quite correct.   Your cotisations are still charged at 25% - 30% but on your real revenue.  This is calculated by subtracting your real costs from your turnover (rather than just applying a fixed rate abattement).

You are correct about tax liability.  As a micro, and particularly if your business is registered in a ZRR then you are unlikely to qualify for income tax.

As for health cover, with the current changes in the system it is difficult to give accurate advice.

Hope this is helpful.

Lisa

[Stu-le-brew]

I am no expert, particularly given the recent changes but you should be interested in how long your E106 will last - normally 2 years can be a little longer. This length is dependant on your work history in Britain and the DHSS, it is only when this expires that you will have to find health cover. An E121 is cover for fully retired people I think

Hope that helps

One additional check you should make for your business is availability of ADSL where your house in France is, I came a bit of a cropper here had to go back to dialup for the first three years here

[cooperlola]

I wish I had a difinitive answer to the health part of your question, Albert, but I don't.  Much seems to depend upon which work scheme you are in.  A friend of mine has been told ( by her Caisse ) that, now that she has worked for the requisite number of hours for one year, she is covered for 5 years even if she gives up now (she teaches).  Others have heard that it's one year (gite owners with registered businesses), so this may depend on the regime you are in.  I think it's just one of the conditions you need to check when you register your business, and  look into the various options open to you.

Obviously, the E106 is pretty irrelevant to you if you're going to work - although it will provide useful cover whilst you're getting off the ground.  If you are paying a self-employed stamp at present, it will only last for 18 months at a maximum, not the 30 months as for those paying an employee's stamp.

[Albert the InfoGipsy]

Dear all, thanks for replying.

I'll be just 60 when I plan to move to France. I've been paying employed NI for the last 8 years because I've been working for my own company, so if I time the move right I could get up to 2.5 years of E106. That would leave me another 2.5 (roughly) to pay for private cover before I qualify for my E121.

I'm an IT consultant and programmer -- no goods, just services, hence the BNC. I'm not sure about turnover, but it could be anything from €20,000 to €60,000 depending on how well my clients weather the economic difficulties that seem to be on the horizon. My real expenses are typically 5-10% of turnover, so if I stay within the micro limits the fixed abbattement would be very advantageous.

Coops, if I can work in France for a year or two and earn enough CMU-style cover to last till I'm 65 then that would allow me to move sooner. If the rules are different for employees rather than self-employed I can look at using a portage or possibly even setting up a EURL, but that could be rather a big investment of time and money for a short term business.

Stu, there is certainly no possible way that I could carry on my business without ADSL -- I typically have to move a gigabyte or two of data across the Net for every project I do.

Lisa, I thought that the standard rate for self-employed cotisations was about 45% of profits. If it's 25% then that makes a big difference to my calculations

The bit about cotisations reducing at about €32,000 comes from the RSI Web site. I may have misinterpreted what it says, so I've copied it below and given a link to it.

http://www.le-rsi.fr/aide_a_la_creation_d_entreprise/protection_sociale/taux_des_cotisations_sociales.php

 

Quelle protection sociale choisir ?

Etape N.4 : L'ensemble de vos cotisations sociales personnelles selon les différents statuts

B. Les taux des cotisations sociales

En régime de croisière, les prélèvements obligatoires sont nettement moins élevés dans les régimes de professions indépendantes, la différence étant d'autant plus forte que la tranche de revenus est élevée. De plus, en début d'activité, vous cotisez sur des bases forfaitaires réduites dans les régimes des professions indépendantes.

Pour l'ensemble des branches maladie, accidents du travail, famille et vieillesse (retraites complémentaires incluses) et CSG, la différence de taux de cotisations avec les gérants minoritaires et les présidents de SAS et de SASU affiliés au régime général est la suivante exprimée en points de cotisations :

TRANCHES DE REVENUS (EN EUROS) ET TAUX DES PRELEVEMENTS OBLIGATOIRES	ENTREPRENEUR INDIVIDUEL ASSOCIE UNIQUE D'EURL ASSOCIE DE SNC GERANT MAJORITAIRE DE SARL RELEVANT DES REGIMES DES PROFESSIONS INDEPENDANTES		GERANT MINORITAIRE OU EGALITAIRE REMUNERE DE SARL OU DE SELARL PRESIDENT REMUNERE DE SAS OU DE SASU		COMPARAISON DES CHARGES SOCIALES ENTRE LES GERANTS MINORITAIRES, PRESIDENTS DE SAS/SASU ET LES POINTS SUPPLEMENTAIRES DE COTISATIONS DUES PAR LES GERANTS MINORITAIRES ET LES PRESIDENTS DE SAS ET DE SASU
					ARTISANS		COMMERCANTS
	Artisans	Commerçants	Gérant ou président non titulaire d'un contrat de travail	Gérant ou président titulaire d'un contrat de travail	Gérant ou président non titulaire d'un contrat de travail	Gérant ou président titulaire d'un contrat de travail (1)	Gérant ou président non titulaire d'un contrat de travail	Gérant ou président titulaire d'un contrat de travail (1)
0 - 1 P 0 à 32 184	46,20%	45,20%	57,35%	64,73%	+ 11,15%	+ 18,53%	+ 12,15%	+ 19,53%
1 P - 3 P 32 185 à 96 552	26,80%	26,30%	53,86%	61,24%	+ 27.06%	+ 34,44%	+ 27,56%	+ 34,94%
3 P - 4 P 96 553 à 128 736	26,80%	19,80%	53,86%	61,24%	+ 27,06%	+ 34,44%	+ 34,06%	+ 41,44%
4 P - 5 P 128 737 à 160 920	19,80%	19,80%	51,60%	52,15%	+ 31,80%	+ 32,35%	+ 31,80%	+ 32,35%
5 P - 8 P 160 921 à 254 472	13,40%	13,40%	51,60%	52,15%	+ 38,20%	+ 38,75%	+ 38,20%	+ 38,75%
> 8 P Plus de 254 472	13,40%	13,40%	31,30%	31,85%	+ 17,90%	+ 18,45%	+ 17,90%	+ 18,45%
P = 32 184€. (plafond annuel de la sécurité sociale en 2007) Pour le détail des taux de cotisations, voir annexe 1.

[lmc]

Hi Albert

With a micro BIC or a micro BNC, cotisations are 24.6% of turnover after abattement.  The difference between BIC and BNC is in the size of the abattement applied which leaves a larger or smaller net figure after it to base the cotisations on.

In the system réel, BICs undergo 45% - 50% cotisations and BNCs 25% - 30% cotisations.  The % difference accounts for the regularisations to make on the previous year's declared revenue and although the % cotisations has been capped for BICs, it hasn't yet for BNCs so if you have very wildly different revenues then the % could vary even more than the 5% given here.

You will notice that in the table above only artisans and commercants are referred to - these are both BIC activities.

The RSI site says "les prélèvements obligatoires sont nettement moins élevés dans les régimes de professions indépendantes, la différence étant d'autant plus forte que la tranche de revenus est élevée."  The obligatory payments are considerably lower for the professions indépendantes and this difference becomes even more marked in the higher revenue brackets.

However, it is as well to bear in mind that in a BNC réel if you have high revenues and low expenses then even if your cotisations are calculated at a relatively (!) low rate then your income tax liability will be higher.  You will also have taxe professionelle to pay so all in all, you are still advised to tuck away 45% to pay for total eventual charges so as not to be caught unawares.

Hope this is clearer.  Sorry I wasn't more specific before.

Lisa

[Will]

As Coops says, if you intend to work then the E106 is irrelevant. You may be entitled to E106 when you move, but as soon as you start working in France the E106 (at least in your circumstances) becomes void.

 

[Albert the InfoGipsy]

Thanks, Will. I was aware of that,  but didn't word things clearly enough. The bit about E106 was assuming that I moved to France and didn't work. It was just to highlight the 2.5 year shortfall in cover.

To avoid having to get private cover (I've got a pre-existing heart condition[:(] ) at some point, essentially my choices are:

work in the UK till I'm nearly 63 then get an E106 till I'm 65

or

work in France until the 'credit' I've built up is enough to cover me as an inactive until my 65th birthday.

So I need to know how the 'credit' is calculated. Work one year to get 5 years inactive cover sounds good. Work 4 years to get one year isn't worth it, for me.

From what I have gleaned so far, I need to find out the rules for the particular caisse that I'd be affiliated to -- as I understand it the RSI acts as a collecting agency for a number of caisses. Does anyone know which caisse(s) deal with professions liberales, particularly IT consultants?

[lmc]

You need CIPAV, Albert.

Try this site:   www.cnavpl.fr

Lisa

 

[Albert the InfoGipsy]

Thanks, Lisa.

This is proving harder than I expected -- and I'm usually pretty pessistic about anything to do with french bureaucracy.