Tax Controls on Micro-Entrepreneurs
23rd June 2023
Government to reinforce tax controls on micro-entrepreneurs.
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Tax Controls on Micro-Entrepreneurs
23rd June 2023
Government to reinforce tax controls on micro-entrepreneurs.
Announcing last month a new plan to combat tax fraud, the Minister of Public Accounts, Gabriel Attal, stated that specific tougher action would be taken against social security fraud by micro-entrepreneurs.
The government estimates the amount of undeclared income by micro-entrepreneurs to be around €800 million each year, resulting in a substantial loss of social security contributions (cotisations) to public finances.
As a result, controls were to be stepped up, and more staff would be recruited to investigate potential fraud cases.
One of the major areas where fraud is suspected is by micro-entrepreneurs who act as intermediaries between households and professionals who use on-line platforms, such as in the food, financial and building sectors, eg Uber, Deliveroo.
From 2026, the platforms will be required to notify URSSAF of sales generated by micro-entrepreneurs and from 2027 they will be obliged to collect social security contributions from micro-entrepreneurs on those sales.
A similar arrangement currently exists with landlords who use lettings platforms such as Airbnb, which is required to inform the government each year of total sales made by owners.
More generally, the Government intends to strengthen IT systems to provide improved cross-correlation of data between different government agencies and platforms in the private sector.
In a move that seems driven more from weakness than strength, next year a grace period will be offered to micro-entrepreneurs who have undeclared their sales to regularise their situation on an amicable basis, without penalty.
In practice, investigations by URSSAF of micro-entrepreneurs are not common, as their turnover is small, averaging around €600 a month.
That said, URSSAF have a fearsome reputation, so it is preferable not to offend them.