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Industrial and commercial profits (BIC): tax regime and reporting

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

Industrial and commercial profits (BICs) are profits made by natural persons engaged in a commercial, industrial or craft activity. They form part of taxable income and are subject to reporting obligations that depend on the applicable tax regime: micro BIC, simplified real or normal real.

Industrial and Commercial Benefits (BICs) are the following benefits:

  • Profits of commercial, industrial or craft professions (sale of goods, objects, supplies, sale of foodstuffs to take away or consume on the spot,...)
  • Profits from commercial activities by assimilation: operation of merchant of goods, real estate rental, laboratory of medical analyzes,...
  • Income from ancillary activities

The following persons are classified as BIC:

  • Individual operator or entrepreneur carrying on business in his own name subject to income tax
  • Unique partner of a EURL: titleContent
  • Partner of a business of persons for the share of the profit corresponding to his rights in the business outcome. These may beCNS: titleContent, single sponsorship business, GIE: titleContent, SARL: titleContent opted for the businesses of persons tax system.

Warning  

if a contractor has opted for assimilation to an EURL, it shall be subject to business tax and no longer subject to the rules on the taxation of industrial and commercial profits.

The tax system depends on the level of gross annual turnover (turnover actually collected).

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Business of trade and supply of housing

This mainly concerns hotels, bed and breakfasts, rural cottages and furnished apartments.

  • The entrepreneur who has an annual sales net of tax (CAHT) of less than €176,200 the micro-BIC (micro-company or micro-BIC) special scheme is imposed.
  • The entrepreneur who has an annual turnover excluding tax (CAHT) of between €176,200 and €818,000 shall be imposed on the actual simplified procedure.
  • The entrepreneur who has an annual turnover excluding tax (CAHT) greater than €818,000 shall be imposed on the normal actual speed.

FYI  

The thresholds are those applicable to 2022 revenues reported in 2023. The 2023 revenue thresholds are €188,700 for micro-BIC and €840,000 for the actual simplified procedure.

Rental of equipment or consumer durable goods

The entrepreneur who has an annual sales net of tax (CAHT) of less than €176,200 shall be imposed on the Micro-BIC (micro-company or micro-BIC) special scheme.

  • The entrepreneur who has an annual turnover excluding tax (CAHT) of between €176,200 and €818,000 shall be imposed on the actual simplified procedure.
  • The entrepreneur who has an annual turnover excluding tax (CAHT) greater than €818,000 shall be imposed on the normal actual speed.

FYI  

The thresholds are those applicable to 2022 revenues reported in 2023. The 2023 revenue thresholds are €188,700 for micro-BIC and €840,000 for the actual simplified procedure.

Provision of services

The entrepreneur who has an annual sales net of tax (CAHT) of less than €72,600 shall be imposed on the micro-BIC (micro-company or micro-BIC) special scheme.

  • The entrepreneur who has an annual turnover excluding tax (CAHT) of between €72,600 and €247,000 shall be imposed on the actual simplified procedure.
  • The entrepreneur who has an annual turnover excluding tax (CAHT) greater than €247,000 shall be imposed on the normal actual speed.

FYI  

The thresholds are those applicable to 2022 revenues reported in 2023. The 2023 revenue thresholds are €77,700 for micro-BIC and €254,000 for the actual simplified procedure.

General case

When you are subject to the simplified effective tax regime, you can decide to opt for the normal effective regime. This option results in the waiver of the simplified real scheme.

The option is to be taken at the time of reporting results the fiscal year preceding the fiscal year in which you want the option to apply.

You're creating your company

When you create your company, you can be automatically subject to the simplified effective tax regime.

If you wish, you can decide to go for the normal real diet. This option results in the waiver of the simplified real scheme.

The option is to be taken at the time of your income statement of your first period of activity.

FYI  

this option is valid for 1 year and is automatically renewed every year.

You can waive this option with the company tax department on which you depend when you file income tax returns for the fiscal year preceding the year in which you want to waive the option.

Determination of the income to be declared

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Special micro-BIC (micro-company or micro-BIC) scheme

A flat-rate abatement for professional expenses shall automatically be applied of:

  • 71% of the CA: titleContent for activities of purchase and resale or supply of housing
  • 50% of the CA: titleContent for service activities

The reduction must be greater than or equal to €305.

A professional, subject to the BIC micro, can opt for the discharge of income tax. In this case, income tax is 1% turnover from the sale of goods or accommodation or catering services, and 1.7% turnover for services.

FYI  

the contributions paid in the context of a quarterly buyback by certain independent professionals are to be subtracted from professional income.

Simplified real scheme

Taxation based on the net profits of the operator, sole trader or partner.

FYI  

Contributions paid in the context of a quarterly buyback by certain independent professionals are to be subtracted from professional income.

Normal Actual Speed

Taxation based on the net profits of the operator, sole trader or partner.

FYI  

Contributions paid in the context of a quarterly buyback by certain independent professionals are to be subtracted from professional income.

Tax returns

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Special micro-BIC (micro-company or micro-BIC) scheme

The income to be declared corresponds to the annual gross turnover excluding VAT before deduction of the allowance. It may also contain any realized gains or losses.

The entrepreneur must declare his taxable income and the exemptions he has received (example: exemption from social contributions) using the form #2042 C Pro . This also applies to the micro-entrepreneur who opted for the discharge payment.

FYI  

BICs are included in the taxable income of the tax household, which takes into account the total amount of BICs. The automatic flat-rate deduction of 10% representative of professional expenses, valid for salaries, is not applicable to the profits of professionals.

Simplified real scheme

The income to be reported is the net profit plus realized capital gains or losses.

The entrepreneur must file his taxable and exempt income tax return using the form #2042 C Pro. He or she must also attach his or her BIC income statement with the form #2031 and the set of annexed tables No 2033-A to 2033-G.

FYI  

BICs are included in the taxable income of the tax household, which takes into account the total amount of BICs. The automatic flat-rate deduction of 10% representative of professional expenses, valid for salaries, is not applicable to the profits of professionals.

Normal Actual Speed

The income to be reported is the net profit plus realized capital gains or losses.

The entrepreneur must file his taxable and exempt income tax return using the form #2042 C Pro. He or she must also attach his or her BIC income statement with the form No. 2031 and the sets of annexed tables #2050, No. 2051, #2052, #2053, No. 2059-E, #2059-G.

FYI  

BICs are included in the taxable income of the tax household, which takes into account the total amount of BICs: the automatic lump sum deduction of 10% representative of professional expenses, valid for salaries, is not applicable to the profits of professionals.

Deadline for declarations

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Special Micro-BIC (micro-company or micro-BIC) scheme

The declaration is made on a monthly or quarterly basis, depending on the choice made by the contractor.

Simplified real scheme

The annual declaration must be made on 2e working day after 1er May.

Normal Actual Speed

The annual declaration must be made on 2e working day after 1er May.

In case of doubt, the entrepreneur can ask for a control of the administration on specific points.

The tax authorities may not impose a financial penalty if the following conditions are met:

  • This is the first time the entrepreneur has made a mistake.
  • The mistake was made in good faith.
  • This is a hardware error (e.g. typing error, wrong address).

The trader may correct himself or may be asked by the administration to regularize his situation.

Warning  

the company subject to an effective tax regime (simplified or ordinary) must file its income statement and its annexes online: either by EDI-TDFC procedure, or on the online business tax account (EFI mode).

In some cases, a multiplier of 1.20 has to be applied to the amount of industrial and commercial profits. This applies to a trader who is subject to an effective tax regime and who is in one of these two cases:

  • He is not a member of a approved association (AA)directly or through a business or group subject to the tax regime for businesses of persons
  • He shall not call upon the services of an accountant or a member business of the Association of Accountants which has signed an agreement with the administration.

Only the profit or loss on the holding which is subject to the progressive scale of taxation shall be increased.

On the other hand, long-term professional gains and losses and deficits are not subject to the 25 % mark-up.

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