What is the micro-BNC scheme? Conditions and obligations
For your self-employed activity or your micro-business, you have opted or wish to opt for the micro-BNC regime.
You probably know that different tax regimes may apply to your specific activity. In the income tax category for non-commercial profits (BNC), there is the controlled declaration regime and the simplified micro-BNC regime.
If you're an entrepreneur or self-employed professional, would you like to know what the micro-BNC or special declaration scheme is, how it works, and what its advantages are? And if you are eligible, what are your various obligations and the micro-BNC declarations that concern you?
We answer your questions in this article. Let's get started!
What is the micro-BNC scheme?
The micro-BNC scheme, for what type of activity?
BNC, or non-commercial profits, are the profits (i.e. the net profit, after deduction of all expenses) made by self-employed people providing an intellectual, artistic or scientific service. They fall into the following categories
- liberal professions such as :
- doctors
- veterinarians
- lawyers
- chartered accountants,
- osteopaths,
- consultants,
- developers,
- coaches,
- designers,
- translators, etc.
- holders of public offices :
- notaries
- bailiffs,
- clerks of the commercial courts,
- auctioneers, etc.
BIC vs BNC: what's the difference?
Unlike BNC, BIC, or bénéfices industriels et commerciaux, are the profits made by individuals exercising an industrial, commercial or artisanal profession.
🔍 A more exhaustive list of liberal professions can be found on the Bpifrance Création website.
Which companies benefit from the micro-BNC scheme? Threshold not to be exceeded
These are microentrepreneurs and self-employed professionals whose annual sales excluding taxes, or CAHT, realized the previous year (N-1) or the year before last (N-2), did not exceed the threshold of :
- 70,000 € for income earned in 2019 and previous years ;
- 72,600 € for income earned in 2020 or later.
☝️ Please note: as the calculation is based on revenues actually received, professionals in their first and second years of practice are automatically eligible for the micro-BNC scheme.
The thresholds are adjusted every three years, and will also apply to income tax for 2021 and 2022.
What income is eligible for the micro-BNC scheme?
The following is a non-exhaustive list of income eligible for the micro-BNC scheme:
- income from the liberal professions (as defined above) ;
- income from offices (as defined above);
- royalties and income from certain professions in the communications and information sectors;
- income from industrial property received by an individual;
- income from intermediaries or transparent agents who act in the name and on behalf of their clients;
- ancillary income earned by non-commercial professions as an extension of their activity, etc.
Obligations of micro-BNC companies
Under the micro-BNC scheme, individuals with a small-scale non-commercial activity can benefit from ultra-simplified formalities on several levels: tax, social and accounting.
If you meet the conditions listed above, here are the rules that apply.
Tax rules
- You don't charge VAT, and you don't reclaim it on your purchases (when you're exempt from basic VAT).
- You do not deduct expenses from your profit.
- You are personally taxed on a flat-rate profit, equal to 66% of revenues.
The tax authorities calculate the net profit by applying a flat-rate deduction of 34% to annual revenues.
ℹ️ This allowance is representative of your professional expenses, and cannot be less than €305.
Calculation example:
- Gross revenues: €40,000
- Flat-rate deduction for annual expenses: €13,600
- Tax base: €26,400
👉 If you are a microentrepreneur, you can opt to pay income tax (IR) in full discharge. This means that you pay IR on the profits made from your professional activity at the same time as social security contributions, on a monthly or quarterly basis.
For BNC, the specific rate of 2.2% of your declared sales is applicable.
Social security rules
Social security contributions are calculated on the basis of your profit, with a flat rate applied.
If you are a micro-BNC entrepreneur, you are automatically covered by the simplified micro social regime .
ℹ️ The rate of payment varies according to the activity carried out, and is applied to the turnover achieved by the microentrepreneur, i.e. to the revenues received during the declaration period.
Accounting obligations
In terms of accounting, the micro-entrepreneur scheme offers ultra-simplified accounting, unlike the controlled declaration scheme.
You are exempt from drawing up :
- annual accounts,
- a daybook,
- and a general ledger.
Your only accounting obligation is to keep a detailed revenue journal, with the following details for each revenue item:
- the name of the customer,
- the amount earned
- and the date.
The receipts book must show the amount and origin of receipts collected, recorded chronologically and distinguishing cash payments from other payments.
How do I declare my micro-BNC income?
When declaring micro-BNC income, professionals must declare their revenues in the second quarter of each year.
In practice, when you file your annual income tax return, your professional income should be entered directly as a gross amount, excluding tax, on the following forms:
- the 2042 global tax return ;
- the 2042 C PRO supplementary tax return.
The flat rate is then applied by the tax authorities.
The special declaratory regime or micro-BNC is therefore highly advantageous, thanks to its simplified declaratory obligations and streamlined formalities. It represents a definite financial advantage when your deductible expenses do not exceed 34% of your annual sales excluding tax.
💡 If your expenses are higher, you're better off choosing the 2035 tax return.
Article translated from French