Tax consequences of the cessation of activity of an individual entrepreneur (voluntary or involuntary)
Verified 21 February 2026 - Entreprendre Service Public / (Prime Minister)
The cessation of activity of an individual business (EI), whether voluntary or not, has consequences on the taxation of profits, on its TVA declaration and on its property taxes.
The cessation of activity of an individual business can 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 individual business entails 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 recognized for future losses or expenses which ultimately never materialized at the time of the cessation of activity.
- Capital gains of fixed assets (offices, plant...) that were completed when the individual business ceased operations.
An individual business who has been in business for at least 5 years may benefit from a capital gains exemption depending on its turnover ({circumflex over ({circumflex over)}). 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 taken into account corresponds to the average annual value over the last two financial years ended during the two calendar years preceding the 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 taken into account corresponds to the average annual value over the last two financial years ended during the two calendar years preceding the 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 taken into account corresponds to the average annual value over the last two financial years ended during the two calendar years preceding the year in which the capital gain was realized.
When should the individual entrepreneur report his profits?
The date of cessation of activity of an individual business is the date on which the contractor decides to cease its activity or on the date on which the court pronounces the judicial liquidation. He then 60 days from this date to send the tax authorities their 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).
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(BIC)
The rules are different depending on the individual business' tax system.
Micro-BIC (micro-entrepreneur)
The individual business is subject to the micro-BIC scheme in respect of the income received in year N if its turnover in N-1 and N-2 was less than €203,100.
The tax return must be filed with the declaration no. 2042. You must also attach the supplementary declaration 2042-C-PRO on which must be indicated the turnover achieved until the cessation of activity in the part " professional industrial and commercial income ».
The declaration must be made by the entrepreneur on his Public Finance area of the website impots.gouv.fr:
Simplified real regime
The simplified real income tax regime (RSI) is applicable to income earned in year N by any individual business whose annual turnover excluding tax carried out in N−1 was between €203,100 and €945,000.
The individual contractor must report its results with the form no. 2031 and the tax package comprising the annexed tables n° 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 form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
The tax administration makes available in case of industrial and commercial profits (BIC) as an indication a template of declaration no 2031 SD.
Normal actual speed
The regime of ordinary real taxation is applicable to individual businesses whose annual turnover excluding tax is greater than €945,000.
shall apply to income earned in year N by any individual business whose annual turnover excluding tax carried out in N−1 was between €203,100 and €945,000.
The individual contractor must report its results with the form no. 2031 and the tax package of Annex tables No 2050, No 2051, No 2052, No 2053, No 2059-F and No 2059-G.
The declaration shall be transmitted electronically in EDI mode, i.e. via a EDI partner (e.g. chartered accountant, specialized service provider).
(BNC)
The rules are different depending on the individual business' tax system.
Micro-BNC diet
The individual business is subject to the micro-BIC regime if its turnover is less than €83,600.
The tax return must be filed with the declaration no. 2042. You must also attach the supplementary declaration 2042-C-PRO on which must be indicated the turnover achieved until the cessation of activity in the part " non-commercial revenues ».
The declaration must be made by the entrepreneur on his Public Finance area of the website impots.gouv.fr:
Controlled reporting regime
The individual entrepreneur is subject to the micro-BIC scheme if his turnover is greater than or equal to €83,600.
The contractor must make his declaration with the form No 2035 and Annexes No 2035 A and No 2035 B.
The declaration must be made in such a way dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
Agricultural Profits (BA)
The rules are different depending on the individual business' tax system.
Micro-BA (agricultural micro-benefit)
The individual business shall be 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 €129,200.
The tax return must be filed with the declaration no. 2042. You must also attach the supplementary declaration 2042-C-PRO on which must be indicated the turnover achieved until the cessation of activity in the part " farm income ».
The declaration must be made by the entrepreneur on his Public Finance area of the website impots.gouv.fr:
Simplified real regime
The Simplified Real Taxation System (SIR) is applicable to individual businesses whose annual turnover excluding tax is between €129,200 and €391,000.
The individual contractor must declare his results with the form n° 2039 and the tax package including the annexed tables No 2039-A-SD to 2039-E-SD.
The declaration must be made in such a way dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
Normal actual speed
The regime of the normal real is applicable to individual businesses whose annual turnover excluding tax is greater than €391,000.
The individual contractor must report its 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 shall be transmitted electronically in EDI mode, i.e. via a EDI partner (e.g. chartered accountant, specialized service provider).
When an individual business subject to TVA ceases its activity, it must file a TVA declaration with the company Tax Office (SIE) to which it belongs. For more information, you can consult our fact sheet on the different TVA regimes.
The termination date corresponds to the date on which the contractor decided to cease its activity or the date on which the court declared the bankruptcy.
The reporting period depends on the TVA regime to which the individual business was subject: actual simplified or standard regime.
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Simplified real regime
The individual business shall be subject to TVA’s simplified real regime where its turnover is:
- For a commercial, craft or liberal activity: less than €945,000
- For an agricultural activity: greater than €46,000
Commercial, craft or liberal activity
The TVA declaration must be made in within 60 days of cessation of activity with form 12:
Annual Statement of Regularization of TVA - Simplified Scheme (No. 3517-12)
It must be carried out in a dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
Agricultural activity
The TVA declaration must be made in within 60 days of cessation of activity with the form n°3517-AGR-SD:
Annual Statement of Regularization of TVA - Simplified Agricultural Scheme
It must be carried out in a dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
Normal actual speed
The individual business shall be subject to TVA’s normal real regime where its turnover is greater than €945,000.
A company engaged in agricultural activity is not covered by TVA’s actual ordinary scheme.
The TVA declaration must be made in within 30 days of cessation of activity with the form {circumflex over (3)}:
TVA and similar taxes - form n°3310-A-SD
It must be carried out in a dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
When an individual business ceases its activity, it is not exempt from paying its property taxes: the companies' property levy (CFE) and the company value added tax (CVAE).
Pay the CFE
The rules for paying the CFE depend on the tax system of the individual business: the actual system or the micro-tax system.
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Actual Regime
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 individual business must pay the CFE for the whole year
- If dissolution has taken place before 31 December, the individual business 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 website impots.gouv.fr.
Micro-tax regime (micro-entrepreneur)
The amount of the CFE depends on the date of cessation of activity (the date on which the micro-entrepreneur decided to stop his activity or the date on which the court declared the bankruptcy):
- If dissolution has taken place on 31 december, the micro-entrepreneur has to 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 Public Finance area of the website impots.gouv.fr.
Declare the CVAE
The individual contractor subject to payment by 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 stop its activity or the date on which the court declared the bankruptcy). This declaration must be made using the Form 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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