Taxation of an Individual Contractor (IC): What You Need to Know

Verified 04 November 2025 - Public Service / Directorate of Legal and Administrative Information (Prime Minister)

In the event of the creation of a company, the individual entrepreneur automatically benefits from the tax regime of the micro-company for the year of creation. However, they can opt for the real income tax (IR) system. It may also decide to be subject to business tax (IS).

As an individual entrepreneur, you are subject to the real income tax regime (general case) if you exceed certain thresholds of turnover.

You can, however, decide to be subject to business tax (IS) in opting to be assimilated EURL.

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Real income tax system (general case)

You are engaged in a commercial or craft activity

You are subject to the income tax in the category of industrial and commercial profits (BIC: titleContent).

The simplified real regime applies when you meet the following conditions:

  • Your turnover does not exceed the following:
    • €840,000 for sales, catering or housing provision activities
    • €254,000 for other activities
  • The amount of VAT you have to pay is less than €15,000

If you do not meet these 2 conditions, you are subject to normal real speed.

Simplified real regime

You must declare your net income to which you add the capital gains or losses realized using the following form:

Supplementary declaration of income of self-employed professions

You must also reach your BIC results report and the annexed tables n°2033-A to 2033-G.

You must file your tax return no later than 15 days after the 2nde working day next to 1er May of the current year, by dematerialization:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • Directly from your subscriber area on the website impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

Normal Real Speed

You must declare your net income to which you add the capital gains or losses realized using the following form:

Supplementary declaration of income of self-employed professions

You must also reach your BIC results report and the supporting tables 2050, 2051, 2052, 2053, 2059-F, 2059-G.

You must file your tax return no later than 15 days after the 2nde working day next to 1er May of the current year, by dematerialization:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • Directly from your subscriber area on the website impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

You are a liberal

You are subject to the the controlled income tax return in the category of non-commercial profits (NCB: titleContent).

You must report your net income that takes into account your revenues and expenses you paid using the following form:

Supplementary declaration of income of self-employed professions

You must also contact your NCO results report and Annexes 2035 A and 2035 B.

You must file your tax return no later than 15 days after the 2nde working day next to 1er May of the current year, by dematerialization:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • Directly from your subscriber area on the website impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

Option for business tax

As an individual entrepreneur you can opt to be assimilated EURL and benefit from the business tax regime.

You must make a statement of income, the date of which will depend on the date on which the last accounting year of your company was closed, by dematerialization:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • If you are subject to the simplified real regime, directly from your subscriber area on the site impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

The declaration must be made at one of the following times:

  • If the accounting year is not ended on 31 December, within three months of the end of the financial year
  • If the accounting year ends on 31 December, 2e working day after 1er May of the following year

FYI  

An additional 15 days is allowed when the declaration is made online.

The payment of the IS is made in 5 times via the EDI or EFI modes: 4 installments and 1 balance. The tax rate is a reduced rate of 15%. It applies to the share of profits up to €42,500. Beyond that, the tax rate is 25%.

Tableau - Dates of payment of SI installments in year N

Closing date of the financial year concerned

1er down payment

2e down payment

3e down payment

4e down payment

From 20 February to 19 May N

15 June N-1

15 September N-1

15 December N-1

15 March N

From 20 May to 19 August N

15 September N-1

15 December N-1

15 March N

15 June N

From 20 August to 19 November N

15 December N-1

15 March N

15 June N

15 September N

From 20 November N to 19 February N+1

15 March N

15 June N

15 September N

15 December N

Tableau - Date of payment of the balance of the SI

Closing date of the financial year concerned

Balance

31 December N-1

15 May N

In Year N

The 15th of 4e month after closing

An individual contractor may be subject to the payment of a number of taxes, including:

  • Value added tax (VAT)
  • Company Property Assessment (CFE)
  • Business Value Added Tax (CVAE)
VAT

Depending on the turnover and the annual amount of VAT that the entrepreneur realizes, he will be subject to a different VAT regime:

  • It is subject to the exemption from VAT if it has a turnover HT: titleContent less than €37,500 for the provision of services or less than €85,000 for trade and accommodation activities.

Please note

A single exemption threshold based on VAT of €25,000 was envisaged by the 2025 budget law. This threshold, whose application had remained suspended, was finally abandoned by the law no. 2025-1044 of november 3, 2025. The VAT-based exemption thresholds therefore remained unchanged.

  • It is subject to simplified real regime if it has a turnover HT: titleContent between €37,500 and €254,000 for the provision of services or €85,000 and €840,000 for trade and accommodation activities. The annual amount of VAT must be less than €15,000.
  • It is subject to normal real speed in one of the following 2 cases:
    • Turnover HT: titleContent greater than €254,000 for the provision of services or more than €840,000 for trade and housing supply activities.
    • Annual amount of VAT greater than €15,000 even if the amount of turnover HT: titleContent is within the limits of the thresholds of the simplified real regime.

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Exemption based on VAT

The entrepreneur is not subject to the payment of VAT.

Thus, sales or services are invoiced without VAT, i.e. excluding tax.

The VAT-based exemption scheme concerns companies with a duty-free turnover below €37,500 for the provision of services or less than €85,000 for trade and accommodation activities.

Please note

A single exemption threshold based on VAT of €25,000 was envisaged by the 2025 budget law. This threshold, whose application had remained suspended, was finally abandoned by the law no. 2025-1044 of november 3, 2025. The VAT-based exemption thresholds therefore remained unchanged.

By benefiting from the VAT exemption system, the company cannot deduct the VAT it has itself paid on purchases it has made in the course of its professional activity.

FYI  

Each invoice shall contain the following statement: " VAT not applicable - Article 293 B of the General Tax Code (CGI) ».

Regardless of the amount of its annual turnover, the company can opting for VAT payment and charge it to its customers. This will allow him to recover deductible VAT on professional expenditure.

The request for an option must be made in writing to the company tax service (SIE) on which it depends. The option takes effect on 1er the day of the month in which it is declared.

Who shall I contact

Simplified real regime

The declaration must be made no later than 2e working day next to 1er May.

VAT must be paid in two installments:

  • 1er prepayment of 55% in July
  • 2nd prepayment of 40% in December

The outstanding amount is payable at the time of the next year's return.

The declaration and payment must be made by dematerialized means:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • Directly from your subscriber area on the website impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

Normal Real Speed

The declaration and payment of VAT are to be made every month for the VAT of the previous month by dematerialization:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • Directly from your subscriber area on the website impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

CFE

A new entrepreneur is not liable to the CFE in the year of its creation and it benefits from a discount la 1re taxation year.

Depending on the contractor's activity and location, it may be temporarily or permanently exempted from the CFE.

The CFE is payable by the contractor who meets the following conditions:

  • It has a turnover or revenue greater than €5,000
  • She habitually pursues a self-employed professional activity

The contractor must make an initial declaration no later than 31 December of the year of establishment at the company tax office of the place of its registered office:

Initial Declaration 1447-C-SD (CFE)

Who shall I contact
CVAE

A new contractor is not liable to the CVAE in the year of its creation. On the other hand, he is liable to the CVAE from the first year if it is a transfer of activity.

The CVAE is due by the contractor who meets the following 2 conditions:

  • It achieves more than €500,000 of turnover HT: titleContent
  • He pursues a self-employed, gainful and habitual professional activity

If the contractor has a turnover greater than €152,500, it must make a declaration of added value and staff even if it is not necessarily subject to payment of the CVAE.

The declaration is to be made on 2e working day next to 1er May by dematerialized means:

  • Through an EDI partner (electronic data interchange) (EDI-TDFC mode)
  • If you are subject to the simplified real regime, directly from your subscriber area on the site impots.gouv.fr (electronic form exchange or EFI)

Online tax account for professionals (EFI mode)

The payment of the CVAE is made by means of 2 installments each corresponding to 50% of the contribution due where the amount is more than €1,500 :

  • 1er deposit to be paid no later than 15 june of the taxation year
  • 2e deposit to be paid no later than 15 september of the taxation year

A declaration of liquidation and regularization is then to be filed, no later than 2e working day after 1er May of the year following the taxation year.

These payments and the declaration of liquidation are to be made by dematerialization with the same intermediaries as the declaration (EDI or EFI).

Other specific taxes can be added as the local tax on outdoor advertising (TLPE)or the preventive archeology tax (PAT) for example.

You have the opportunity to benefit fromtax relief and tax credits.

There are several tax breaks that will depend on either your activity, orlocation of your head office, oractions you will take :

FYI  

When you start your business, you can benefit from of tax exemptions over a short period. This is the case for the company property tax (CFE).

We present you a list of words and notions that you will often find, with their definition:

  • Abatement : Lump-sum or proportional reduction applied on the basis of a tax calculation (income, value of property, etc.)
  • Subjugation : Be compelled to pay something (e.g., have to pay business tax)
  • Turnover : Sum of sales of goods or services of a company in an accounting period
  • Controlled reporting : Non-commercial profit reporting scheme with a value greater than €77,700 HT: titleContent
  • Relief : Partial or total remission of tax
  • Fiscal year : The period during which a company records each economic fact in the course of its activities. An accounting year is usually 12 months
  • Exemption : Exemption from payment of tax
  • Exemption based on VAT : Special scheme which exempts the company from declaring and paying VAT on the services or sales it makes
  • Income tax : Tax calculated and levied on income, profits and capital gains
  • Recovery : Payment of a tax
  • Micro-fiscal regime : Special tax regime applicable to sole proprietorships whose turnover HT: titleContent does not exceed certain thresholds
  • Normal Real Speed : Tax regime that applies to profits and VAT. It is applicable to companies that generate a turnover HT: titleContent above certain thresholds
  • Simplified real regime : Tax regime that applies to profits and VAT. It's for companies that have a turnover HT: titleContent between 2 thresholds.
  • VAT : Tax that is not directly collected by the State. This tax is added to the price of all the products to which it applies
  • Active : All the assets and rights that constitute the assets of a company (machinery, treasury, stock, etc.)
  • Depreciation : Loss of value of a company asset due to wear and tear and time
  • Agricultural Profits (BA) : Income from a farm. Farm profits are subject to income tax.
  • Industrial and Commercial Benefits (BIC) : Profits made by a person engaged in a commercial, industrial or craft activity
  • Non-commercial profits (NCB) : Profits made by a person exercising a non-commercial professional activity (liberal profession, copyright, etc.)
  • Dividends : Payment of money or shares of a company to its shareholders
  • Fixed assets : They are of 3 types (property, plant and equipment, intangible assets and financial assets) and correspond to non-expendable property held by the company. These may be, for example, business assets, patents, office equipment, long-term financial securities, etc.
  • Corporate tax : Tax calculated and levied on the company's annual income
  • Tax Book : All tax returns (balance sheet, income statement, supporting documents) submitted by a company
  • Passive : It consists of equity (fixed liability) and debt (current liability)
  • Capital gain/capital loss : Positive or negative difference between the purchase price and the sale price of a property or movable property
  • Income from movable capital : Income from securities (units, shares, bonds, etc.)

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