How does the auto-entrepreneur (micro-entrepreneur) regime work for tax in France?

The auto-entrepreneur regime (formally micro-entrepreneur since 2016) is a simplified business structure for freelancers and sole traders in France. Tax and social contributions are calculated as a flat percentage of turnover — there is no deduction for actual expenses. This makes administration simple but can be costly if expenses are high.

For 2024, the turnover ceilings are €188,700 for trading and accommodation businesses, and €77,700 for services and liberal professions. Income tax under the micro regime uses an abatement against turnover: 71% for trading, 50% for services, and 34% for liberal professions (BNC). The remaining percentage is added to other household income and taxed at the usual progressive rates.

Auto-entrepreneurs can opt instead for the versement libératoire, paying income tax at a flat rate directly on turnover each month or quarter: 1% for trading, 1.7% for services, and 2.2% for liberal professions. This replaces the normal income tax and can be advantageous for households in higher marginal tax brackets.

Social contributions (cotisations sociales) are paid on top at rates of roughly 12.3% to 22% depending on the activity type. Both income tax and cotisations are reported and paid through the auto-entrepreneur portal (autoentrepreneur.urssaf.fr).