Law No. 2015-1785 of December 29, 2015, concerning the 2016 budget, contains provisions directly relevant to businesses.
I. Threshold effects in micro-enterprises and SMEs
The effects of thresholds in micro-enterprises and SMEs have been limited by the finance law by raising the thresholds or neutralizing the effects despite crossing the threshold for a certain period.
New thresholds
- Before the law was passed, employers with fewer than 10 employees contributed 1% to continuing vocational training. Now, this threshold has been raised to 11 employees. At the same time, employers with at least 11 employees will also have their contribution to continuing vocational training set at 1% (Articles 235 ter D and 235 ter KA of the French General Tax Code).
- The condition relating to the threshold of employees necessary for the exemption from business property tax which benefits establishments created in priority areas of the city is raised from 10 to 11 employees (Art. 1466 AI septies of the CGI).
- The exemption from social security contributions for contributions paid for the benefit of employees, former employees and their beneficiaries for the financing of supplementary welfare benefits (Art. 137-15 of the Social Security Code (CSS)) benefits employers with fewer than 11 employees instead of 10 previously.
- From now on, employers of at least 11 people and no longer "more than" 9 people will be subject to the transport levy (Art. L.2333-64 of the General Code of Local Authorities).
Neutralizing threshold effects
- Public limited companies, simplified joint-stock companies and limited liability companies whose securities are not admitted to trading on a financial instruments market, which can opt for the tax regime for partnerships, may continue to benefit from this option when the threshold of fifty employees is reached or exceeded during a financial year ending from December 31, 2015 and until December 31, 2018. This regime applies for this financial year and the two following financial years, within the limit of the period of validity of the option (Art. 239 bis AB of the CGI).
- For financial years ending between January 1, 2015 and December 31, 2017, when a company, at the closing date of the financial year, finds that it has exceeded the threshold of 50 employees, this circumstance does not cause it to lose the benefit of the tax credit for profit-sharing bonuses during that financial year and the two following financial years (Art. 244 quater T of the CGI).
- Employers who reach or exceed the number of 11 employees in 2016, 2017 or 2018 are eligible for exemption from social security contributions for contributions paid for the benefit of employees, former employees and their beneficiaries for the financing of supplementary welfare benefits (Art. 137-15 of the Social Security Code).
- The flat-rate deduction of employer contributions applicable to companies with fewer than 20 employees for overtime continues to apply for three years to employers who reach or exceed the workforce of 20 employees in 2016, 2017 or 2018 (Art. 241-18 V bis of the CSS).
II. Combating the concealment of revenue (Art. 88): Obligation of professionals subject to VAT
The law includes a measure to combat VAT fraud using point-of-sale systems that conceal a portion of revenue. A new requirement, applicable from January 1, 2018, mandates that VAT-registered businesses use only accounting or management software or point-of-sale systems that meet specific requirements for data integrity, security, retention, and archiving for tax audit purposes. This compliance must be attested by a certificate issued by an accredited body or by an individual attestation from the software publisher, conforming to a template established by the tax authorities.
Failure to produce the certificate or attestation during a tax audit will result in a fine of €7,500 per accounting or management software or point-of-sale system concerned. The business will have sixty days from the date of delivery or receipt of the official report issued by the tax authorities to comply with the regulations.
