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Old Nov 2nd 2017, 7:25 am   #16
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Default Re: How much tax and contributions?

Welcome to the forum Lavers69 and I have to say I agree with every word, including your endorsement of Valérie at startbusinessinfrance, I've never used her business advice services but she helped me with a different kind of project, and I know that another form member petitefrançaise also speaks highly of her.

I've often tried to make the point on here that you have to forget about how things work in the UK when you move to another country. Sometimes posters say "We're moving to France next week and we're going to do X Y and Z" and the first thing that springs to mind is, "but that will be an administrative nightmare". Too many people just assume that if you can do it in the UK, you can do it here. Then when they find it's just not possible, or it is possible but they don't like what's involved, it's all France's fault for not being the same as the UK. It's not the same, the rules are different because the whole mindset is different and it does take a while, well it took me a while, to appreciate why things are as they are and you also start to see that the UK system, whilst easy in many ways, also has faults that France wants to avoid. I think that rather than starting off from "This is exactly what I'm going to do, now how do I do it" it's better to approach it with an open mind, start by finding out what your options are and choose the best one. Unfortunately it's not always what people want to hear.

Bonne continuation Lavers69
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Old Nov 2nd 2017, 8:37 am   #17
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Default Re: How much tax and contributions?

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Originally Posted by Lavers69 View Post
I can only speak from my own experience of having a SARL company in France (essentially a Limited company) and having closed that down and now running as an Auto-Entrpreneur (Self employed status). I agree with one of the earlier comments about Ex-Pats moaning about the bureaucracy and high charges but not bothering to find out the rules in the first place. That was certainly me!

Here is just a number of points I have learned
1.) In France, you need to think in reverse to the UK. Social charges (National Insurance) is the big cost around 35-45%, tax is the lower cost (10%-ish).
2.) SARL status is good if you need to protect your liabilities, etc. But if you are essentially a one man band it is like having a Rolls Royce when you only need a reliable run-around car. It is quite an expensive set up to run.
3.) Accountants - you need an accountant if you have a SARL. I was paying €150 per month. In retrospect, he was an excellent bookkeeper, but I wouldn't necessarily say that he ever gave any financial planning/business advice (which is what I would say an accountant should do). But if you don't ask the right questions then you can't expect good answers!
3.) I would recommend a SARL structure if you are anticipating your business to expand in the future (exponentially). The reason why I say that is because if you can retain some profit in the business and draw it down as dividends, then it does become an excellent structure because you don't pay the big costs (social charges) on dividends. This was where I came unstuck because I went through a messy house-build and I had to draw down virtually all my turnover as salary/profit.
4.) Social Charges - in my experience the social charges have averaged out at 45% of operating profit. Everyone who has run a business in France will have their war stories about the social charges. There are various bodies (RSI, CIPAV, URSAFF) which are responsible for collecting the social charges depending on your business registration/status. What you have to remember, especially if you are starting up is that the social charges is largely a predictive system. The body responsible for collecting them will predict (based on your Year 1 or Year 2 business results) what you need to pay in Year 3. The problem comes when you have a stellar couple of years, but then your revenue drops off. You will still have to pay out for the social charges, even if you are not earning. My experience of RSI, CIPAV, etc is that yes they are dangerously incompetent (they seem to almost make up the figures on the payment demands), but they are OK to deal with if you go back to them with actual annual reports, accountants figures.
5.) Starting out I would recommend an Auto-Entrepreneur status. The reason why I say that is because a.) it is quick to set up; b.) you always know where you stand - a simple 25%-ish deduction based on total revenue; c.) it is good if you have a low cost/expenses base; d.) if you don't earn you don't pay. The AE will get you into the French system. The earnings limits are about to double to around €60,000, but as one poster commented on another thread, the VAT (TVA) limits will remain at around €34,000 (so if you earn over this you will have to charge TVA). I don't know if that then means that you can reclaim back any TVA you have paid in connection with your business??
6.) As a summary point. You have to pay your taxes. They probably are slightly higher in France than the UK, but you are not living in the UK, you are living in France. I think tax was once described as the cost of having a civilized society and I think that this certainly rings true in France. You certainly see where most of the money is spent (hospitals, roads, etc). Running a business though, you have to decide if the cost in terms of the administration time and tax/charges is excessive or it is just the cost of doing business in France. Choosing the right structure for your business is therefore paramount.

The best bit of advice I can give you is to sign up with a website based up in the North of France called Starting a business in France (or something like that). The Woman that runs it knows her stuff and it is probably the best €150 you will ever spend.
Hi, and welcome to the forum from a fellow Héraultaise!
I agree with all you've said, having been there and done that myself. I paid 50% of my nominal salary into social charges, but have reaped the benefit since retirement. I regret having set up an S rl, but, at the time, the healthcare coverage and pension for Indépendents were peanuts and, of course, Auto-Entrepreneurs didn't exist last century...
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Old Nov 5th 2017, 2:46 pm   #18
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Default Re: How much tax and contributions?

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Originally Posted by EuroTrash View Post
Welcome to the forum Lavers69 and I have to say I agree with every word, including your endorsement of Valérie at startbusinessinfrance, I've never used her business advice services but she helped me with a different kind of project, and I know that another form member petitefrançaise also speaks highly of her.

Bonne continuation Lavers69
Hello and welcome from me too!

Definitely recommend Valerie at startabusinessinfrance.
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Old Nov 16th 2017, 3:13 pm   #19
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Default Re: How much tax and contributions?

Lavers69 said it all in his post. You pay about a month's salary in tax a year but you pay more contributions for health, "prévoyance", eventual future unemployment and retirement. It's worth it though because all those public services are terrific. The medical care is brilliant (no waiting lists, no wards) and the state pension is more than 4 times that of the UK.
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