Auto-entrepreneur - The new ’statut’ that gives you a license to bill

Pige when Possible

Before considering the auto-entrepreneur option members should always check to see if the freelance work they intend to do can be covered by France’s unique ’pige’ system of payment for journalists. This is by far the best way to be paid for freelance work here and should always be favoured if possible.

Our French trade union colleagues fought long and hard for the creation of the pige system, which is a set up that means that for each piece of work a France-based freelancer does for a French employer, he or she will be treated as an employee.

The journalist will be paid a net sum from which all statutory social security contributions have been deducted at source. He or she will also receive an official payslip.

The problem with piges is that they only work if your employer is a French company or the France-based operation of an international firm. The company must also be legally recognised as a media operation and the work you are doing legally considered journalism. This last criteria would be unlikely to be the case if you were doing translation work, PR or writing books, for example.

And those of us who work for tight-fisted British or American employers know only too well that if we suggested our overseas paymasters followed the example of their French counterparts and coughed up to cover our social security payments the response would be short and not particularly sweet.

In such cases the auto-entrepreneur option may be interesting.

Maximum earnings

People opting for the status of auto-entrepreneur cannot earn more than €32,000 gross a year under the scheme if they work in the service sector. This would be the case for journalistic and other written work.

You can of course earn other money elsewhere.

For example, someone working on a part-time contract at a major employer such as France 24 could use the auto-entrepreneur option to bill for up to €32,000 worth of freelance work not covered by piges, for example for an employer based outside of France.

Retired people also have the right to combine an activity as an auto-entrepreneur with their pension payments.

VAT

You do not register for VAT under the auto-entrepreneur scheme.

Social Security Charges

As an auto-entrpreneur you pay social security charges at a fixed rate of 23% on your gross earnings.

This amount covers all your statutory social security charges, which are:

 Health insurance

 Family allowance payments

 Basic pension scheme

 Supplementary pension scheme

 Death or permanent injury insurance

 The CSG/CRDS (two taxes that are meant to pay off the massive deficit of the French social security budget and don’t).

 Something called indemnité journalière, which your author presumes means you get some kind of basic sick pay if you are off work, but may not mean that at all. In any case, you have to pay it.

If you earn no money in a given year, then you pay no charges (23% of nothing being nothing).

Taxe Professionnelle

After three years you will also be liable to pay the taxe professionnelle (TP). This is not a social security charge, but a a local tax levied on companies and self-employed people. However, if you can prove that your principle activity as an auto-entrepreneur is exempt from this tax, you will not have to pay it. Paris branch has a list of exempt activities and can try to give you some guidance, but we are not tax experts. You should seek advice from a professional French tax accountant before asking for an exoneration.

It should also be noted that earlier this year (2009) President Nicolas Sarkozy announced that the TP would be scrapped in 2010. As mentioned above, the TP is a local tax, which goes to local authorities, giving them a certain limited amount of leeway to decide how they organise their affairs and a small amount of independence from central government. Most local authorities in France are left-wing. President Sarkozy isn’t. Your author couldn’t possibly comment on whether this fact and the announcement to scrap the TP are linked.

 Link to Sarkozy announcement on scrapping TP

 List of activities exempt from TP

Billing

As an auto-entrepreneur you will have an approved registration number, which means you can bill for your services.

More Information

The French authorities have set up a website that explains the auto-entopreneur system in far more detail than this article.

It is in French of course and you can get to it by clicking the link below

 http://www.lautoentrepreneur.fr/

You can sign up as an auto-entrepreneur via the site or by visiting your local Centre de Formalités des Entreprise (CFE).

You can find your local CFE in the ’phone book or ask your local tax office for details.