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Industrial and Commercial Profits (BIC): Tax System and Returns

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

Industrial and commercial profits (BIC) are the profits made by natural persons engaged in a commercial, industrial or craft activity. They are part of the 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:

  • Profits of the commercial, industrial or craft professions (sale of goods, objects, supplies, sale of goods to be taken or consumed on the spot,...)
  • Profits of commercial activities by assimilation: transaction of merchant of goods, real estate rental, laboratory of medical analyses,...
  • Income from ancillary activities

The following persons are classified as BIC:

  • Individual Operator or Contractor acting on his own behalf subject to income tax
  • Unique Associate of a EURL: titleContent
  • Partner of a business of persons for the share of the profit corresponding to his rights in the business. This may include:SNC: titleContent, business in simple sponsorship, GIE: titleContent, SARL: titleContent having opted for the taxation of businesses of persons.

Warning  

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

The tax regime depends on the level of gross annual turnover (actual revenue received).

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Business and supply of housing

This mainly concerns hotels, guest rooms, rural and furnished tourist cottages.

  • Contractor who achieves an annual tax-free turnover (CAHT) of less than €176,200 is imposed on a special micro-BIC diet (micro-company or micro-BIC).
  • An entrepreneur who achieves an annual tax-free turnover (CAHT) between €176,200 and €818,000 shall be imposed on the actual simplified scheme.
  • Contractor who achieves an annual tax-free turnover (CAHT) greater than €818,000 is imposed on the normal real regime.

FYI  

The thresholds are those applicable to 2022 revenues reported in 2023. The 2023 income thresholds are €188,700 for micro-BIC and €876,000 for the simplified actual scheme.

Lease of equipment or goods for sustainable consumption

Contractor who achieves an annual tax-free turnover (CAHT) of less than €176,200 is imposed on the special Micro-BIC (micro company or micro BIC) diet.

  • An entrepreneur who achieves an annual tax-free turnover (CAHT) between €176,200 and €818,000 shall be imposed on the actual simplified scheme.
  • Contractor who achieves an annual tax-free turnover (CAHT) greater than €818,000 is imposed on the normal real regime.

FYI  

The thresholds are those applicable to 2022 revenues reported in 2023. The 2023 income thresholds are €188,700 for micro-BIC and €876,000 for the simplified actual scheme.

Service Delivery

Contractor who achieves an annual tax-free turnover (CAHT) of less than €72,600 is imposed on the special micro-BIC diet (micro-company or micro-BIC).

  • An entrepreneur who achieves an annual tax-free turnover (CAHT) between €72,600 and €247,000 shall be imposed on the actual simplified scheme.
  • Contractor who achieves an annual tax-free turnover (CAHT) greater than €247,000 is imposed on the normal real regime.

FYI  

The thresholds are those applicable to 2022 revenues reported in 2023. The 2023 income thresholds are €77,700 for micro-BIC and €264,000 for the simplified actual scheme.

General case

When you are subject to the simplified effective tax regime, you may decide to opt for the normal effective tax regime. This option will result in a waiver of the simplified actual plan.

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

You create your company

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

If you wish, you can choose the normal actual diet. This option will result in a waiver of the simplified actual plan.

The option should be taken at the time of your declaration of results of your first period of activity.

FYI  

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

You can waive this option with the company tax service that you depend on when the return for the fiscal year preceding the year in which you want to waive the option.

Determination of income to be reported

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

A lump sum allowance for professional expenses of:

  • 71% of AC: titleContent for the activities of buying and selling or providing accommodation
  • 50% of AC: titleContent for service activities

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

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

FYI  

contributions paid as part of a quarter buyback by certain independent professionals are to be excluded from professional income.

Simplified Actual Regime

Taxation based on the net profits of the operator, individual contractor or partner.

FYI  

Contributions paid as part of a quarter buyback by certain independent professionals are to be excluded from professional income.

Normal Actual

Taxation based on the net profits of the operator, individual contractor or partner.

FYI  

Contributions paid as part of a quarter buyback by certain independent professionals are to be excluded from professional income.

Tax returns

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

The income to be reported shall be the gross annual turnover excluding VAT before the deduction of the allowance. It may also contain realised capital gains or losses.

The entrepreneur must report his or her taxable income and exemptions (e.g., exemption from social contributions) using the form #2042 C Pro . This also applies to the micro-entrepreneur who has opted for the release.

FYI  

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

Simplified Actual Regime

The income to be reported is the net profit to which the realised gains or losses are added.

The Contractor must file a taxable and exempt income tax return using the form #2042 C Pro. He or she must also attach his or her BIC return with the form No 2031 as well as the book of the annexes n°2033-A to 2033-G.

FYI  

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

Normal Actual

The income to be reported is the net profit to which the realised gains or losses are added.

The Contractor must file a taxable and exempt income tax return using the form #2042 C Pro. He or she must also attach his or her BIC return with the form No 2031 as well as the books of the annexed tables No 2050, No 2051, No 2052, No 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 flat-rate deduction of 10% representative of professional expenses, valid for salaries, is not applicable to the profits of professionals.

Reporting Due

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

Reporting is done on a monthly or quarterly basis based on the contractor's choice.

Simplified Actual Regime

The annual declaration must be made on 2e next business day 1to May.

Normal Actual

The annual declaration must be made on 2e next business day 1to May.

In case of doubt, the contractor may request administrative control over specific points.

The tax authority may not impose a financial penalty on him if the following conditions are met:

  • This is the first time the contractor has made a mistake.
  • The mistake was made in good faith.
  • This is a hardware error (input error, wrong address, for example).

The trader can correct himself or be asked by the administration to regularise his situation.

Warning  

a company subject to a real (simplified or normal) taxation regime must file its income tax return and schedules online: either by EDI-TDFC procedure, or online tax account for professionals (EFI mode).

In some cases, a multiplier of 1.20 must be applied to the amount of industrial and commercial profits. This applies to the trader who is subject to a real taxation regime which is in one of these 2 cases:

  • He is not a member of a approved association (AA), directly or through a business or group subject to the taxation of businesses of persons
  • It does not call on the services of a public accountant or a Member business of the College of Public Accountants, which has signed an agreement with the administration.

Only the income of the holding subject to the progressive scale of the tax is increased.

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

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