Tax consequences of the cessation of activity of an individual entrepreneur (voluntary or involuntary)
Verified 01 January 2026 - Entreprendre Public Service / Directorate of Legal and Administrative Information (Prime Minister)
The cessation of activity of an entity (EI), whether voluntary or not, has consequences on the taxation of profits, on its VAT return and on its property taxes.
The cessation of activity of an entity may take place in different ways:
- Voluntary termination by the contractor
- Following a bankruptcy
- Following the death of the contractor
The cause of the cessation of activity does not affect the tax consequences. Only the deadlines can be different.
The cessation of activity of the immediate taxation profits.
What are the profits and capital gains taxable immediately?
Taxable profits are as follows:
- Profits realized since the end of the last fiscal year
- Profits suspended from taxation. These are mainly the provisions which have previously been incurred for future losses or expenses which have never been realized at the time of the cessation of activity.
- Capital gains of fixed assets (offices, factory...) which were carried out when the company ceased to operate.
A person who has been in business for at least 5 years may benefit from an exemption from capital gains based on turnover (turnover). Turnover thresholds vary depending on the company's activity.
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Sales Activity (BIC)
The exemption shall be total where the company's turnover does not exceed €250,000 included.
The exemption shall be partial where the turnover of the company is between €250,000 excluded and €350,000 excluded.
FYI
The amount of turnover taken into account corresponds to the average annual turnover during the last 2 financial years ended during the 2 calendar years preceding the year of closing of the financial year in which the capital gain was realized.
Service Delivery Activity (BIC and BNC)
The exemption shall be total where the company's turnover does not exceed €90,000 included.
The exemption shall be partial where the turnover of the company is between €90,000 excluded and €126,000 excluded.
FYI
The amount of turnover taken into account corresponds to the average annual turnover during the last 2 financial years ended during the 2 calendar years preceding the year of closing of the financial year in which the capital gain was realized.
Agricultural activity (BA)
The exemption shall be total where the company's turnover does not exceed €350,000 included.
The exemption shall be partial where the turnover of the company is between €350,000 excluded and €450,000 excluded.
FYI
The amount of turnover taken into account corresponds to the average annual turnover during the last 2 financial years ended during the 2 calendar years preceding the year of closing of the financial year in which the capital gain was realized.
When should the individual entrepreneur declare his profits?
The date of cessation of activity of a contractor is the date on which the contractor decides to cease its activity or on the date on which the court pronounces the bankruptcy. He then 60 days from this date to send the tax authority its last tax return.
FYI
In the event of the death of the individual contractor, the heirs have 6 months from date of deathto file the return of income that has not yet been reported before death.
How to declare your profits?
The tax return is different depending on the profits made by the company: industrial and commercial profits (BIC) or non-commercial profits (BNC) or agricultural profits (BA).
Warning
Revenue generated from 1er January 2026 (and reported in 2027) is submitted, for the application of the micro-entrepreneur (micro-fiscal) tax system, to new thresholds, of which the amount will be set by the finance law for 2026. This law must be passed in the coming weeks.
In the meantime, the budgetary provisions planned for 2025 have been renewed by a special law no. 2025-1316 of 26 december 2025.
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Industrial and Commercial Benefits (BIC)
The rules are different depending on the tax regime of the entity.
Micro-BIC (micro-entrepreneur)
If the turnover of the entity is less than €188,700.
The tax return must be made with the declaration no. 2042. You must also attach the supplementary declaration 2042-C-PRO on which must be indicated the turnover achieved up to the cessation of activity in the section ‘ professional industrial and commercial income ».
The declaration must be made by the entrepreneur on his space Particular site impots.gouv.fr:
Simplified real regime
The Simplified Real Taxation System (RSI) applies to sole proprietorships whose annual turnover excluding tax is between €188,700 and €840,000.
The individual contractor must report their results with the form no. 2031 and the tax package comprising the Annex Tables 2033-A to 2033-G.
This declaration must be made in such a way that dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry forms (EFI mode). The company completes them itself, by connecting to its professional space impots.gouv.fr :
Online tax account for professionals (EFI mode)
- Either by going through a software special exchange (EDI mode). In this case, the company or more generally its representative (for example an accountant) enters all the information required and then sends it to the administration.
- Either through the Portailpro account
Portailpro.gouv: common portal to simplify your declarations and payments
FYI
The tax administration makes available in case of industrial and commercial profits (BIC) as an indication a model of Declaration No 2031 SD.
Normal real speed
The regime of normal real taxation applies to sole proprietorships whose annual turnover excluding tax is greater than €840,000.
The individual contractor must report their results with the form no. 2031 and the tax book of annex tables 2050, 2051, 2052, 2053, 2059-F and 2059-G.
The declaration must be transmitted electronically in EDI mode, i.e. via a EDI Partner (e.g. chartered accountant, specialized service provider).
Non-Commercial Earnings (NCB)
The rules are different depending on the tax regime of the entity.
Micro-BNC regime
If the turnover of the entity is less than €77,700.
The tax return must be made with the declaration no. 2042. You must also attach the supplementary declaration 2042-C-PRO on which must be indicated the turnover achieved up to the cessation of activity in the section ‘ non-commercial revenues ».
The declaration must be made by the entrepreneur on his space Particular site impots.gouv.fr:
Regime of controlled reporting
The individual entrepreneur is subject to the micro-BIC regime if his turnover is greater than or equal to €77,700.
The contractor must make his declaration with the form No 2035 and Annexes 2035 A and 2035 B.
The declaration may be made in one of the following ways:
- Either by the entrepreneur himself on his professional account on the site impots.gouv.fr (EFI mode)
- Either by using the services of a EDI Partner (e.g. chartered accountant)
Agricultural Profits (BA)
The rules are different depending on the tax regime of the entity.
Micro-BA (agricultural micro-benefit)
L’is subject to the micro-BA scheme if the annual average of its turnover calculated over years N-1, N-2 and N-3 is less than €120,000.
The tax return must be made with the declaration no. 2042. You must also attach the supplementary declaration 2042-C-PRO on which must be indicated the turnover achieved up to the cessation of activity in the section ‘ farm income ».
The declaration must be made by the entrepreneur on his space Particular site impots.gouv.fr:
Simplified real regime
The Simplified Real Taxation System (RSI) applies to sole proprietorships whose annual turnover excluding tax is between €120,000 and €391,000.
The individual contractor must declare his results with the form n° 2039 and the tax package including the Annex Tables 2039-A-SD to 2039-E-SD.
The declaration may be made in one of the following ways:
- Either by the entrepreneur himself on his professional account on the site impots.gouv.fr (EFI mode)
- Either by using the services of a EDI Partner (e.g. chartered accountant)
Normal real speed
The normal real regime applies to sole proprietorships whose annual turnover excluding tax is greater than €391,000.
The individual contractor must report their results with the form no. 2143 and the tax book of the annexed tables No 2144-SD, No 2145-SD, No 2146-SD, No 2146-bis-SD, No 2147-SD, No 2148-SD, No 2149-SD, No 2150-SD, No 2151-SD, No 2151-bis-SD, No 2152-ter-SD, No 2152-SD, No 2152-bis-SD, No 2153-SD and No 2154-SD.
The declaration must be transmitted electronically in EDI mode, i.e. via a EDI Partner (e.g. chartered accountant, specialized service provider).
When a person subject to VAT ceases to be active, he must make a VAT declaration to the company Tax Office (SIE) on which he depends. For more information, you can consult our fact sheet on the different VAT regimes.
The termination date is the date on which the contractor decided to cease its activity or the date on which the court declared the liquidation.
The reporting period depends on the VAT regime to which the person was subject: simplified or normal real regime.
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Simplified real regime
The entity shall be subject to the simplified real VAT regime where its turnover is:
- For a commercial, craft or liberal activity: less than €840,000
- For an agricultural activity: greater than €46,000
Commercial, craft or liberal activity
The VAT declaration must be made in within 60 days of cessation of activity with CA 12:
Annual VAT adjustment declaration - Simplified scheme (No. 3517-CA12)
It can be transmitted in mode EDI or EFI :
- In EDI mode, the contractor uses the services of a third party to make his declarations. We're talking about EDI Partner.
- In EFI mode, the entrepreneur makes his own declarations via his professional account on the website impots.gouv.fr:
Agricultural activity
The VAT declaration must be made in within 60 days of cessation of activity with form n°3517-AGR-SD:
Annual VAT adjustment declaration - Simplified agricultural scheme
It can be transmitted in mode EDI or EFI :
- In EDI mode, the contractor uses the services of a third party to make his declarations. We're talking about EDI Partner.
- In EFI mode, the entrepreneur makes his own declarations via his professional account on the website impots.gouv.fr:
Normal real speed
The entity shall be subject to the normal real VAT regime where its turnover is greater than €840,000.
The company which carries out an agricultural activity is not covered by the actual standard VAT arrangements.
The VAT declaration must be made in within 30 days of cessation of activity with form CA3:
VAT and similar taxes - form n°3310-A-SD
It can be transmitted in mode EDI or EFI :
- In EDI mode, the contractor uses the services of a third party to make his declarations. We're talking about EDI Partner.
- In EFI mode, the entrepreneur makes his own declarations via his professional account on the website impots.gouv.fr:
When a business ceases to operate, it is not exempt from paying its property taxes: the companies' property tax (CFE) and the company Value Added Assessment (CVAE).
Pay the CFE
The rules for the payment of the CFE depend on the tax system of the entity: actual system or micro-tax system.
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Actual Speed
The amount of the CFE depends on the date of cessation of activity (the date on which the contractor decided to cease its activity or the date on which the court declared the liquidation):
- If dissolution has taken place on 31 December, the {circumflex over (x)} must pay the CFE for the whole year
- If dissolution has taken place before 31 December, the {circumflex over (a)} may ask the tax authorities to calculate the amount of its CFE in proportion to the working time. The application must be made before December 31 of the following year. This request is made on his professional account of the site impots.gouv.fr.
Micro-tax regime (micro-entrepreneur)
The amount of the CFE depends on the date of cessation of activity (date on which the micro-entrepreneur decided to stop his activity or the date on which the court declared the liquidation):
- If dissolution has taken place on 31 December, the micro-entrepreneur must pay the CFE for the whole year
- If dissolution has taken place before 31 December, the micro-entrepreneur may ask the tax authorities to calculate the amount of his CFE in proportion to the working time. The application must be made before December 31 of the following year. This request is made on his particular space of the site impots.gouv.fr.
Declare the CVAE
The individual contractor subject to the payment of the CVAE must make his declaration of the added value and of his employees in within 60 days of ceasing to operate (the date on which the contractor decided to cease its activity or the date on which the court declared the liquidation). This declaration must be made using the Form No. 1330-CVAE-SD.
The declaration of liquidation and regularization must also be attached in the same deadlines using the Form No. 1329-DEF.
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