What changes for sole traders (auto-entrepreneurs) in 2020

The sole trader (auto-entrepreneur) status changes every year. Depending on when you set up your business, here’s what changes for you.

Sole trader: the overhaul of the ACRE

Registering as a sole trader online should become simpler over the course of the year. As soon as you register your business on the URSSAF Auto Entrepreneur website, your contributor account for the micro-social and micro-tax scheme is automatically created.

Under decree 2019-1215, published on 22 November 2019 and effective from 1 January 2020, the ACCRE was replaced by the ACRE. The ACCRE was the Aid for Unemployed People Creating or Taking Over a Business, while the ACRE is the Aid for Business Creators and Takeovers.

The ACRE provides a temporary exemption from social security contributions. It also opens up rights to the ARCE, the Aid for Business Takeover or Creation. The terms of the exemption depend on the date your business was created.

Since this reduction in charges is calculated on a calendar-quarter basis, it makes sense to set up your business in January, April, July or October.

If you started your business in 2020, you benefit from a 25% exemption during the following four calendar quarters, then 10% for the following four calendar quarters.

If you started your business before 2020, the exemptions are as follows:

For a business started in 2018

For a business started in 2019

Note that the ACRE is no longer granted automatically — sole traders must now apply for it.

Sole trader revenue thresholds

The revenue thresholds set by the 2020 finance law are as follows:

• €176,200 for the sale of goods, with a VAT threshold of €85,800 and a tolerance threshold of €94,300;
• €72,500 for other services, with a VAT threshold of €34,400 and a tolerance threshold of €36,500.

You can no longer qualify for the micro-social scheme if you exceed these thresholds for two consecutive years. In that case, you must switch to the standard tax regime.

Withholding tax applied to sole traders

If your sole trader status is recent, the tax authorities have no history for you. You can wait until September for your payment notice, pay installments using the tax authorities’ simulator, or opt for the final withholding payment (versement forfaitaire libératoire).

The Corporate Land Tax (CFE — Cotisation Foncière des Entreprises) for sole traders is a local tax due from the second year of activity if your business is registered at your home address. It only changes in 2020 if your municipality has changed its rates.

Sole traders’ rights

Since 1 January 2020, self-employed workers have joined the general social security and health insurance scheme.

As for pensions, things remain unclear, as the terms have not yet been definitively set.