Micro-enterprise without turnover: social protection for the entrepreneur

Here, it is important to distinguish two situations: entrepreneurs who have only one professional activity and those for whom it is a secondary activity.

The entrepreneur has no other professional activity

For the entrepreneur who has no other professional activity, the lack of turnover is a problem with regard to his social protection. In this situation, the entrepreneur does not pay social contributions.

In return, the social protection of the entrepreneur is impacted. For example, the amount of daily allowances and certain allowances may be reduced. Also, there are consequences in terms of retirement rights.

When the micro-enterprise is the only activity, the lack of turnover is an important problem at the level of social protection.

Micro-enterprise is a secondary activity

When the micro-enterprise is used to exercise a secondary activity, the entrepreneur is affiliated with the oldest health insurance fund. However, he may decide on the option of being affiliated with the other fund to which he contributes.

  • A person under an employment contract who creates a micro-enterprise to exercise a secondary activity remains affiliated to the general social security system. On the other hand, he pays social contributions to the general scheme, and to the social scheme for self-employed workers. However, he only obtains his reimbursements from one of these two plans.
  • For a retired person who creates a micro-enterprise, the principle is similar. She remains affiliated with the health insurance fund to which she was attached before the creation of the micro-enterprise.
  • When the microenterprise is a secondary activity, the lack of turnover is not a significant problem.

A micro-enterprise without turnover is written off after 24 months

Finally, there is a final impact for a micro-enterprise with no turnover. A micro-enterprise is automatically written off if there is no turnover for 8 consecutive quarters or 24 months.

From 1st January 2019, the income tax will be deducted at source. This reform concerns employees, retirees and also self-employed workers. However, for the self-employed, the withholding of income tax will take place with a different mechanism: a tax deposit will be taken monthly or quarterly by the tax administration. The use of the tax return estimator comes useful there.

The application of the IR withholding tax for the self-employed

For the self-employed, the withholding tax will be materialized by the application of an income tax deposit calculated by the tax authorities on the basis of the income statement.

The operation will therefore not be the same as the withholding tax applied to employees and retirees (withholding tax practiced by a third party payer). A mechanism is specifically put in place for self-employed workers given the fluctuation in their income from one year to another.