A difficult subject and often a source of tension: should we sell products for professional or private purposes?
As you will see, the rules are very simple because every time you create handmade items to sell or buy crafts for regular resale you are behaving like a professional.
Then you have to register before you can start your activity and pay social security contributions, income tax and sometimes VAT.
So what does the law say?
YOU SELL GOODS THAT YOU MADE YOURSELF
If you regularly produce goods for sale (artisans, artists), you behave like a professional.
The regularity of the activity can be characterized by the opening of an online store on a marketplace or on its own site, or by the promotion of products on the Internet or social networks. If, you can prove the regularity of your activities from the second sales transaction, you are behaving like a real business.
Someone will tell you that they only resell their works to reimburse the cost of purchasing the materials used in the creation, as if their purpose was not to make money, not to lose money. Of course, in the case of a control, this argument will not hold.
If you generate income, you are taxable.
YOU ARE SELLING USED PROPERTY ON A CASUAL BASIS
If you sell personal items (second-hand items) that you no longer want to keep and this activity is one-off, you are not engaged in professional activities and do not need to register. It is said that you are acting within the framework of the " management of your private wealth ".
If you sell second-hand furniture in the garage, or sell too little clothing on the site (ex: Vinted), you won't behave like a professional, which makes sense! Therefore, you do not need to report this type of income.
Two exceptions, however:
- If you are selling precious metals (gold, silver, platinum) or jewelry, art, collectibles or antiques, and the price exceeds 5,000 euros, you have to pay the flat rate and CRDS (refund of social debt). For more information on flat tax rates, click here .
- If you sell other types of goods whose value is greater than 5,000 €, you will pay income tax at the rate of 19% and social security contributions (CSG, CRDS, ...) at the rate of 17.2 %. You will realize what is called a "capital gain on movable property". However, sales of used vehicles and household appliances are tax exempt regardless of the amount of the sale.
SO WHAT TO DO WHEN YOU ARE A PROFESSIONAL?
The micro-enterprise scheme - more commonly known as auto-enterprise - is a simplified form of sole proprietorship. The status of auto-entrepreneur, which has undergone changes in 2020, makes it easier to create your own company, in particular thanks to simplified administrative, tax and social procedures.
1. The advantages of self-employment
Even if there are drawbacks (limited turnover, non-deductible charges ...) the status of self-employed is above all advantageous, in particular by the simplicity of its management,
A status accessible to all, you can be: Employee, Student, Civil servant (under certain conditions), Job seeker
Simplified registration, unlike other companies, no need to have a capital contribution, the only conditions to be respected are:
- Be a natural person
- Be over 18 (or emancipated minor)
- Live in France
- Hold a temporary residence permit if you are a national of a country outside the European Union
- the amount of the contributions is calculated according to the turnover of the self-employed person;
- social charges correspond to 12.8% of turnover for the sale of goods and 22% for most other activities;
- the rate of social contributions is lower at the start of the activity thanks to ACRE;
- the auto-entrepreneur can pay his expenses on a monthly or quarterly basis;
- the declaration of turnover and the payment of contributions are made online;
- in the absence of turnover, the auto-entrepreneur has no social charges to pay.
Easy accounting , it is not necessary to go through an accountant. it is mainly characterized by:
- the obligation to keep a book of receipts (and possibly a register of purchases in the case of a buying and selling activity);
- the obligation to have a bank account dedicated to its activity;
- a VAT deductible (up to a certain amount of turnover);
- the possibility of opting for the final payment of income tax;
2. The specifics for craftsmen and traders
- For craftsmen, registration in the Directory of Trades (RM) is compulsory.
- For traders, registration in the Trade and Companies Register (RCS) is compulsory.
- If registration is free, taxes for fees Chamber of Commerce (CCI) and Chamber of Trades (CMA) are collected at the same time as social contributions.
3. The specifics of the diet
A capped turnover, p To keep the profit of the auto-enterprise, he has the obligation to respect the turnover ceilings in force. The thresholds were revised upwards in 2020.
Two deductible thresholds based on VAT , for the auto entrepreneur the operation of the VAT is particular, basic it is exempt, however it loses profit if it exceeds certain threshold.
A bank account dedicated to the activity , this is no longer an obligation, unless the turnover is greater than € 10,000 for 2 consecutive years, from there he will have to centralize all his financial transactions on a dedicated account:
- customer payments;
- payments of social and tax contributions;
- expenses related to the exercise of the activity (purchase of equipment, raw materials, etc.);
- payment of remuneration to the current account.
4. The taxation of the auto-entrepreneur
The taxation of the auto-entrepreneur is simple: you choose between the classic regime or the final tax payment.
If you opt for the classic regime, you declare your full turnover with your income tax declaration and a flat-rate allowance for professional expenses will take place of:
- 71% of turnover if you have an activity of purchase sale or supply of accommodation services,
- 50% of turnover if you exercise another activity falling under the BIC (Industrial and Commercial Profits),
- 34% of turnover if your activity is liberal.
If you opt for the discharge payment, income tax is paid definitively as and when the turnover is collected. Every month or every quarter, depending on the deadline you choose for your social contributions, you pay your income tax amount at the same time. All you have to do is apply an additional percentage of:
- 1% of turnover if you have an activity of purchase sale or supply of accommodation services,
- 1.7% if you carry out another activity falling under the BIC (Industrial and Commercial Profits),
- 2.2% if your activity is liberal.
To find out more about your tax regime, contact the tax service of the companies on which you depend or consult the website of the Tax Administration:
https://www.impots.gouv.fr/ ("Professional" section)
5. Social protection for the self-employed
Since 2020, social cover for the self-employed is managed by different bodies, when the activity is carried out as a main activity or in addition to another activity:
- When the auto-enterprise is a complementary activity, the auto-entrepreneur remains attached to his insurance scheme (general social security scheme, etc.)
- When the auto-entrepreneur is a main activity, the social cover of the auto-entrepreneur is managed by the general social security system.
| To find out more about your social security scheme, visit the Social Security for Independents website:|