Individual limited liability contractor (EIRL): What are the rules?

Verified 01 January 2023 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Justice

The EIRL can no longer be chosen at the time of the creation of the company. However, the IRLs created before February 16, 2022, continue to operate.

Warning  

Since 1er january 2023, it is no longer possible to carry out your procedures in a company Formalities Center (CFE). You must make them on the website of the company formalities office.

Individual entrepreneurs who have chosen the status of EIRL before 16 february 2022 continue to be subject to the rules of the EIRL.

The EIRL allows the entrepreneur to build a professional estate separate from the personal estate by a declaration of the use to which the assets are put. During the life of the company, it is possible to change this heritage by adding or by withdrawing property.

In the event of the death or cessation of activity of an EIRL, heirs or rights-holders may no longer pursue the professional activity under the status of EIRL. They have to ask for delisting the EIRL on the website of the company formalities window.

Company Formalities Window

Such deletion shall result in the deletion from the register on which the EIRL depends (i.e. the SCR: titleContent, or RNE: titleContent or the register kept at the Registry of the Commercial Court depending on the activity of the EIRL).

FYI  

From 1er January 2023, the National company Register (NCR) replaces the Trades Directory (RM).

The status of the EIRL allows, in case of difficulty of your company, protect your personal property by separating them from your professional heritage.

The personal heritage is thus protected, while being able to serve as a pledge for personal claims.

Only heritage assigned to the professional activity, in other words, property necessary for the professional activity, may be seized by the professional creditors.

You are affected by different rules:

However, in the event of fraud or serious and repeated failure to comply with tax, social or accounting obligations, your personal responsibility is engaged.

The sums due for the professional activity, which have not been paid because of this fraud or these breaches, can therefore be recovered from your personal wealth.

Please note

Since the law of 14 February 2022 on self-employed persons, the allocation of property to an already established affected heritage or the removal of elements of the affected heritage is still possible.

The income tax system, which is specific to individual entrepreneurs, applies by default. The EIRL may also opt for the business tax system.

Income tax

The EIRL shall be under the responsibility of taxation of micro-companies if it does not exceed certain turnover or revenue thresholds.

2022 turnover (reported in 2023)

You report to the taxation of micro-companies when your annual turnover duty-frees of 2022 does not exceed the following thresholds:

  • €176,200 for activities relating to the sale of goods, articles, supplies and foodstuffs to be taken away or consumed on the spot, or the supply of accommodation, and
  • €72,600 for the supply of liberal services and other benefits.

When these thresholds are exceeded, you are automatically subject to the normal or simplified real speed. The actual normal or simplified regime differs depending on the nature of the activity. If you are engaged in a commercial activity, you are subject to the tax system of the BICs and if you are engaged in a non-commercial activity, it is NTB regime which applies.

Turnover 2023 (reported in 2024)

You report to the taxation of micro-companies provided that the annual turnover hExcluding tax of 2023  does not exceed the following thresholds:

  • €188,700 for activities relating to the sale of goods, articles, supplies and foodstuffs to be taken away or consumed on the spot, or the supply of accommodation, and
  • €77,700 for the supply of liberal services and other benefits.

When these thresholds are exceeded, you are automatically subject to the normal or simplified real speed. The actual normal or simplified regime differs depending on the nature of the activity. If you are engaged in a commercial activity, you are subject to the tax system of the BICs and if you are engaged in a non-commercial activity, it is NTB regime which applies.

Tax on businesses

You have the option of opting for business tax (IS) at 2 different times:

  • During the creation of the company by checking the corresponding box on the design form
  • During the life of the EIRL, the option is made by a letter sent to the company tax office (SIE) within 3 ers month of the financial year in respect of which the company wishes to be taxed at the IS

Micro-companies who are subject to income tax may opt for the SI provided they opt for it for an effective tax system. This choice is valid for 2 years.

Your earnings are deductible from income and are taxed on income tax.

FYI  

The EIRL that chooses the SI may waive the SI scheme until 5e the financial year following that in respect of which it exercised its option.

You report to the social security scheme for self-employed persons (SSA) and are attached to the general social security system.

The income used to calculate your social security contributions corresponds to the self-employed professional income (the company's profits).

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Your company is subject to income tax (IR)

Social security contributions are calculated on the basis of taxable profit of the company (i.e. Industrial and Commercial Benefits (BIC) or non-commercial profits (NBC) including your remuneration).

In the absence of remuneration or in the case of insufficient remuneration, there are minimum contributions for sickness, maternity, daily allowances, retirement and invalidity and death insurance.

You are not entitled to unemployment insurance.

FYI  

as for other self-employed persons, social benefits (in particular the right to retirement) depend on the contributions actually paid.

Your company is subject to business tax (SI)

Social security contributions are calculated on your net remuneration received.

You are not entitled to unemployment insurance.

FYI  

As for other self-employed persons, social benefits (notably the right to retirement) depend on the contributions actually paid.

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