2018 will be a year of many changes for entrepreneurs. Application of the 2018 finance law, GDPR, increase in CSG, certified cash register software, doubling of turnover ceilings for micro-enterprises … But what are then changes for businesses in 2018 ?
1) The changes that will apply to all businesses
1- Lower corporate taxes
The government plans to lower the 25% corporate tax rate by 2022. Indeed, today, in 2017, this tax is 33.3%.
This reduction in the SI will therefore take place in different stages:
|Corporate tax rate|
|Exercises open from 1st January||SMEs eligible for the 15% CIT rate||Other businesses|
|2018||15% up to € 38,120||28% up to € 500,000|
|28% for the fraction of the profit between € 38,120 and € 500,000|
|33 1/3% above € 500,000||33 1/3% above € 500,000|
|2019||15% up to € 38,120||28% up to € 500,000|
|28% for the fraction of the profit between € 38,120 and € 500,000|
|31% above € 500,000||31% above € 500,000|
|2020||15% up to € 38,120||28%|
|28% above € 38,120|
|2021||15% up to € 38,120||26.5%|
|26.5% above € 38,120|
|2022||15% up to € 38,120||25%|
|25% above € 38,120|
2- Application of the GDPR
The General Data Protection Regulation (GDPR) or General Data PrivacyRegulation (GDPR) will enter into force in the 28 countries of the European Union from May 25, 2018. This new European standard concerns all companies who directly or indirectly manipulate the personal data of their users.
All legal entities (companies, associations and institutions) are concerned with the subject of the Protection of personal data. If you collect information from individuals in any way, you are affected by the GDPR.
Among the measures introduced by the GDPR, we find the principle of “explicit” and “positive” consent, the obligation to clearly communicate to users the use made of their data, the limitation of data retention for the duration of their use, guarantee of modification, restitution and erasure of data at the request of the individuals concerned, the right to be forgotten, the implementation of preventive data protection measures, information in the event of data leakage, as well as the right to portability of personal data.
3- Termination of the CICE and the CITS
In 2019, the Competitiveness and Employment Tax Credit (CICE) and the Payroll Tax Credit (CITS) will deleted. These will then be replaced by a device relief from employer contributions. This was decided despite the resistance of the employers.
Changes to the CICE rate will be made in 2018. In fact, the CICE rate will be lowered by 7% to 6% of the payroll.
4- Repeal of the marginal rate of the tax on wages
Today, the increased rate of payroll tax is 20%. From 1st January 2018, the remuneration concerned will be taxed up to 13.60%, as in 2013. This measure aims to attract foreign companies to French territory.
5- Increase in the CSG
The CSG will increase by 1.7 points on January 1, 2018 on all activity and savings income. The compensation provided for on the payroll of employees by the elimination of sickness (0.75%) and unemployment (2.4%) contributions will take place in two stages: part (2 points on 3.15% of salary) on the 1st January 2018, the rest (1.15 points) in October 2018.
6- Obligation to have certified cash register software
From 1st January 2018, any person subject to VAT would be required to use software or a cash register system that satisfies the conditions of unalterability, security, conservation and archiving of data with a view to verifying the tax administration, as attested by a certificate issued by an accredited body or by an individual certificate from the publisher, conforming to a model fixed by the administration.
This obligation would apply to taxable persons who make deliveries of goods and services which do not give rise to invoicing and record these operations by means of software or a cash register system.
Taxable persons benefiting from a VAT-based exemption and those exclusively carrying out operations or services exempt from tax would be exempt from this obligation.
2) For business creators and buyers
If during their 1time year of activity, creators and buyers of businesses have an annual internal income of 40,000 euros, so they will benefit from a white year of social contributions.
Therefore, from January 1, 2019, the exemption will take the form of a widening of eligibility conditions for exemption currently reserved for unemployed creators and business owners (ACCRE).
3) For small businesses & microenterprises
1- Doubling of turnover ceilings for micro-enterprises
Today, the annual turnover of microenterprises should not exceed € 82,800 for activities of sale of goods and € 33,100 for activities of services.
Although the implementing decrees have not yet been published in the Official Journal (OJ), the government has announced that as of the income tax in 2017, the thresholds for micro schemes (micro-BIC and micro- BNC) would no longer be aligned with those of the VAT-based franchise. These thresholds would be raised and brought to:
- € 170,000 if it is an operator whose main business is to sell goods, objects, supplies and foodstuffs to take away or to eat on the spot or to provide accommodation, excluding the direct or indirect rental of furnished or intended to be furnished furnished accommodation;
- € 70,000 if they are other operators or BNC holders.
The limits provided for the VAT-based exemption regime would remain unchanged.
Correspondingly, the reference to increased thresholds of € 91,000 and € 35,200 would be deleted for the taxation of profits and retained for the VAT-based franchise regime.
Consequently, a single limit (€ 170,000 or € 70,000 depending on the activity carried out) would be retained for the application of micro plans.
2- Reduction in social security contributions for the self-employed
Indeed, the self-employed will benefit from 2 contribution reductions. This is to erase the effect of the upcoming increase in the CSG.
First, a down 2.5 points will be performed on family contributions.
The second decrease concerns health contributions. This decrease will be 1.5 points. In particular, it will allow gain in purchasing power for about 75% of independent. However, it will affect those whose annual income does not exceed 43,000 euros per year.
3- The removal of the RSI
Promise of Emmanuel Macron, the RSI will be deleted from 1st January 2018. The independent will then be integrated into the general scheme, with a two-year transitional phase.
This measure should enable the self-employed to benefit from the same quality of management as that of the general scheme.
4- Exemption from property tax
Good news ! From 2019, businesses whose Turnover is less than 5,000 euros will exempt from property tax.
Note: there will also be an exemption from additional taxes to the property assessment of companies assigned to consular chambers.
About the Author :
Pierre Seillier, Marketing and communication manager of WITY.
Pierre began his career within the Presidency of the Republic, as an assistant to the adviser for communication and the press. In 2012, he joined Influence 360, a communications agency in Hong Kong. He then had clients for business banks and luxury brands. Since 2016, he has been responsible for marketing and communication at WITY, a startup specializing in online accounting and legal and strategic support.
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