Individual entrepreneur: switching from income tax (IR) to business tax (SI)

Verified 30 January 2024 - Directorate for Legal and Administrative Information (Prime Minister)

As an individual entrepreneur (EI), whether or not you are a micro-company, you are automatically subject to income tax (DI). If you wish to be subject to business tax (IS), you must opt to be treated as a EURL.

As an individual entrepreneur, you are subject automatically to theincome tax (IR)in the category of industrial and commercial profits (BIC) or non-commercial profits (NTB) on the taxable profit made by your activity.

You are then subject either to an effective tax regime (simplified or normal) or to a micro-tax regime (micro-BIC or micro-BNC).

You can, however choose to be taxed on business tax (SI). To do this, you need to opt for a single person company with limited liability (EURL).

Assimilation to a EURL: titleContent subject to IS has several consequences.

Tax consequences

From a tax point of view, this assimilation creates a tax personality distinct from yours. Your company is subject to certain specific business tax rules, including deficit carry-over and those concerning capital gains.

Impact on the taxation of your remuneration

Your remuneration is taxed on income tax in the wages and salaries. Your income other than your earnings is taxed on income tax in the income from movable capital (RCM).

Impact on your social security contributions

You are subject to social contributions of self-employed persons on your net earnings. This is your remuneration after deducting your mandatory personal social contributions and your actual expenses (expenses incurred in the course of your business). Such remuneration shall also be increased by optional premiums and contributions.

You are also subject to the social contributions of the self-employed for those parts of the income distributed above 10% of your net profit.

You must send a request by mail company Tax Service (SIE) on which your company depends (where the main establishment is located):

Who shall I contact

You must specify the next items :

  • Name
  • First Name
  • Name : Sole trader or IS
  • Address
  • Signature

You must notify your option for assimilation before the end of 3e fiscal month of your activity.

The option to be assimilated to a EURL: titleContent is irrevocable.

However, you can ultimately decide to waive the business tax. This renunciation can be made up to the month preceding the payment of the first installment of SI of 5e next financial year the one in which you opted to be assimilated EURL.

The waiver must contain next items :

  • Name of your company
  • Address
  • If it is different from the address, the place of its main establishment
  • Fiscal year to which the waiver applies

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