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 will no doubt be aware that different tax regimes may apply to your specific activity. In the income tax category for non-commercial profits (BNC), there are the controlled declaration scheme and the simplified micro-BNC scheme.
If you are an entrepreneur or self-employed professional, would you like to know what the micro-BNC scheme 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 apply to 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
- veterinary surgeons
- 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 industrial and commercial profits, are the profits made by individuals exercising an industrial, commercial or craft profession.
🔍 A more exhaustive list of liberal professions can be found on the Bpifrance Création website.
Which businesses benefit from the micro-BNC scheme? Threshold not to be exceeded
These are micro-entrepreneurs and self-employed professionals whose annual turnover excluding tax, or CAHT, realised 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 received from 2020 onwards.
☝️ Note: as the calculation is based on income 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 indicated above);
- copyright and income from certain professions in the communication 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 received by non-commercial professions as an extension of their activity, etc.
Obligations of companies under the micro-BNC scheme
Under the micro-BNC scheme, individuals carrying on a small-scale non-commercial activity can benefit from ultra-simplified formalities in a number of areas: tax, social security and accounting.
If you meet the conditions listed above, here are the rules that apply.
Tax rules
- You do not charge VAT and you do not recover it on your purchases (when you are exempt from basic VAT).
- You do not deduct your expenses from your profits.
- You are personally taxed on a flat-rate profit equal to 66% of the revenue received.
The tax authorities calculate the net profit by applying a flat-rate deduction of 34% to the annual revenue received.
ℹ️ This allowance represents your professional expenses and cannot be less than €305.
Example of calculation:
- Gross receipts: €40,000
- Flat-rate deduction for your annual expenses: €13,600
- Tax base: €26,400
👉 If you are a microentrepreneur, you can opt to pay income tax in full discharge of your obligations. This means that you pay income tax on the profits from your professional activity at the same time as your social security contributions, on a monthly or quarterly basis.
The specific rate of 2.2% of your declared turnover applies to BNC.
Social security rules
The social security contributions payable are calculated on the basis of your profit, using a flat rate.
If you are a micro-BNC entrepreneur, you are automatically covered by the simplified micro social scheme .
ℹ️ The rate of payment varies according to the activity carried out, and is applied to the turnover achieved by the microentrepreneur, i.e. the income received during the declaration period.
Accounting obligations
In terms of accounting, the micro-entrepreneur scheme allows you to benefit from 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 showing, 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 the receipts collected, recorded chronologically and distinguishing cash payments from other payments.
How do you declare your micro-BNC income?
When declaring income under the micro-BNC scheme, professionals must declare their income each year, during the second quarter.
In practice, when you file your annual 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 declaration scheme or micro-BNC scheme is therefore very advantageous because of its simplified declaration obligations and reduced formalities. It represents a definite financial advantage when your deductible expenses do not exceed 34% of your annual turnover excluding tax.
💡 If your expenses are higher, you will be better off choosing the 2035 return.
Article translated from French