TL;DR : Micro if modest turnover and need for simplicity. Real (IR) if your actual expenses exceed the micro deduction and you invest. EI under IS if recurring profit and ability to leave cash in the business. Automatic separation of assets since 2022. Thresholds 2025: micro sales €188,700, micro services €77,700; non-classified furnished rentals €15,000; VAT exemption threshold base €85,000 (sales) / €37,500 (services).
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2025 Context and Legal Reminder for EI
Since May 15, 2022, the individual enterprise (EI) automatically benefits from a separation of professional and personal assets. Professional creditors generally act only on the professional assets. There are legal exceptions (certain tax and social debts, fraud, personal guarantees given to the banker). The micro-enterprise is not a separate status: it is a tax and social regime of the EI. You can therefore be an EI under micro, real (IR), or opt for IS without creating a company, via the provided tax assimilation.
On the environmental side, 2025 sees the continuation of efforts to simplify thresholds and the adjustment of the VAT exemption base. The micro-BIC rules for non-classified tourist furnished rentals are tightened for 2025 income (dedicated ceiling €15,000). Result: the “right” regime depends more than ever on your cost structure, your clients (B2B/B2C), your need for deductible VAT, and your remuneration strategy.
How to Choose: Decision Logic
The choice is made in three steps:
- Compare the micro deduction to your actual expenses + depreciation. If your real costs exceed the deduction, the real regime often prevails fiscally.
- Test the VAT: if your clients are taxable (B2B) and your purchases/components are significant, collecting and deducting VAT in real terms can improve your net margins.
- Arbitrate IR vs IS: if you do not need to extract 100% of the profit and can capitalize in cash, the IS allows you to deduct your remuneration and tax the balance at 15%/25% under conditions.
Micro-Enterprise 2025: Thresholds, VAT, When It’s Relevant
Micro thresholds 2025 (annual turnover):
- Sale of goods / accommodation (excluding tourist furnished rentals): €188,700.
- Provision of BIC/BNC services and liberal professions: €77,700.
- Non-classified tourist furnished rentals: specific threshold €15,000 for 2025 income (declared in 2026).
Advantages: very simplified formalities and accounting, social and tax contributions proportional to collected turnover, liberatory payment possible if N-2 taxable income is below the threshold. Ideal for testing a market, intellectual activities with low costs, or simple B2C services without VAT.
Limitations: inability to deduct actual expenses and to depreciate, sometimes unfavorable allowances if your costs exceed the sector average, less suitable B2B image when VAT is standard. Repeated threshold exceedances switch you to the real regime.
EI under the real regime (IR): benefits, obligations, indicators
Under the real regime, you keep full accounting records and deduct the expenses actually incurred (purchases, rents, subcontracting, subscriptions, insurance, travel, etc.) and can depreciate your fixed assets (equipment, IT, fittings). You collect VAT if you exceed the exemption threshold or if you have voluntarily left it, and you deduct it on your eligible expenses.
Benefits: “fair” taxation if you have significant costs or capex, better economic clarity, increased credibility in B2B. Key indicators: gross margin, expense/turnover ratio, level of investments, share of clients subject to VAT, need for provisions.
When to switch: simple rule — if your actual expenses + depreciation > micro allowance, the real regime often prevails. If you anticipate a significant investment (equipment, premises), the real regime may also be necessary to spread the effort via depreciation.
EI with corporate tax option: mechanism, use cases, safeguards
Since 2022, an EI can opt for corporate tax by being fiscally treated as an EURL (or EARL). Consequences: the result is taxed at corporate tax (15% up to €42,500 under SME conditions, then 25%), your remuneration is deductible from the corporate tax result and personally taxed in the appropriate category. The option must be notified before the end of the 3rd month of the targeted fiscal year; a withdrawal is possible within a short window, then the option becomes irrevocable.
When it is relevant: you generate a recurring profit after a “market” remuneration, you do not need to withdraw 100% of the cash each year, and you want to capitalize. Corporate tax can reduce personal tax and stabilize your overall burden by adjusting salary/dividends.
Safeguards: increased accounting complexity, double taxation level in case of distribution, risk of over-taxation if you need to withdraw a lot of cash, option and monitoring formalities. EI asset protection remains but does not prevent personal guarantees that a lender may require.
VAT 2025: exemption threshold and switch
In 2025, the VAT exemption threshold remains the central tool to simplify invoicing for small businesses. Usual benchmarks:
- Goods / catering / accommodation: base threshold €85,000, increased threshold €93,500.
- Services and liberal professions: base threshold €37,500, increased threshold €41,250.
- Lawyers / authors: base threshold €50,000, increased €55,000.
Practical rule: exceeding the base threshold makes you liable from the following January 1st. Exceeding the increased threshold triggers VAT liability from the first day of the excess. Note: micro thresholds and exemption thresholds are not the same. You can still be under micro status but already liable for VAT depending on your amounts and activity.
Contributions, ACRE, CFE and useful formalities
ACRE: partial and temporary exemption from social contributions at the start of activity, under conditions (type of activity, effective control of the company, etc.). The reduction applies over a limited period; the mechanism differs for micro and real regimes. The application follows a strict schedule via Urssaf.
CFE: exemption for the first calendar year at creation if you submit the 1447-C-SD form on time. Afterwards, CFE is due based on the minimum municipal base; permanent exemption if turnover ≤ €5,000. Consider local exemption schemes (ZFU, ZRR, etc.).
Single window: centralized online formalities to create, modify, and cease your activity. Plan for delays during peak periods and keep receipts.
Practical numerical cases
Case A — Intellectual services BNC, significant costs
Data: turnover €70,000; actual expenses €22,000 (subcontracting, software, professional rent, travel). Micro: 34% allowance → IR base €46,200 without actual deduction, no depreciation nor recoverable VAT. Real: profit €48,000 (70,000 – 22,000), but you deduct “to the cent” and recover VAT if liable; depreciation smooths your capex. Arbitration: if your actual expenses consistently exceed the allowance, the real regime is more efficient.
Case B — E-commerce BIC with high purchases
Data: turnover €180,000; purchases + logistics €132,000; other expenses €12,000. Micro sales possible (threshold €188,700), but the 71% allowance may not finely reflect costs. Real: deduction of purchases and expenses, VAT recovery, management of net margins. Corporate Tax possible if you generate recurring profit and wish to retain it in the company.
Case C — B2B consultant with high margin
Data: Revenue €120,000; expenses €20,000; annual personal need €48,000. Actual IR: everything goes up to the income tax and social contributions. IS: you set a “market” salary (deductible), leave some profit at the 15%/25% rate and decide on dividends later. Key: IS becomes relevant if you do not extract 100% of the profit each year.
Case D — Unrated furnished tourist rental in 2025
Data: €22,000 short-term unrated rental income. In 2025, specific micro threshold €15,000 and micro-BIC allowance 30%. Beyond that, actual regime mandatory → actual expenses, depreciation, local obligations. Conclusion: the “non-rated seasonal” model quickly shifts to the actual regime; possible alternative via rating or long-term rental.
Checklist to help with the choice
- Project your revenue, expenses and capex over 12–24 months.
- Calculate micro allowance vs actual expenses + depreciation.
- Identify your B2B/B2C clients and the benefit of recovering VAT.
- Test IR vs IS over 3 years, including contributions and CFE.
- Check VAT thresholds and option conditions, and anticipate the switch.
- If opting for IS, respect the “before the end of the 3rd month” window.
- ACRE: eligibility, filing within deadlines, mitigation schedule.
- CFE: file 1447-C-SD the year of creation, then follow the annual notice.
- Keep proofs: quotes, invoices, contracts, eligibility certificates.
FAQ
Is a micro-enterprise the same as a sole proprietorship?
Yes, in terms of status: the micro is a tax and social regime of the sole proprietorship. The legal status remains “sole proprietor”.
Can I opt for IS during the year?
You must notify the option to the administration before the end of the 3rd month of the concerned fiscal year. A withdrawal is possible within a short window, then the option becomes irrevocable.
What are the micro thresholds for 2025?
Sales/accommodation: €188,700; services/liberal professions: €77,700. Unrated furnished rentals: threshold €15,000 for 2025 income declared in 2026.
What are the VAT exemption thresholds for 2025?
Goods/restaurant/accommodation: base €85,000, increased €93,500. Services/liberal professions: base €37,500, increased €41,250. Lawyers/authors: base €50,000, increased €55,000.
Is the primary residence protected?
Yes, against professional creditors thanks to the separation of assets since 2022, subject to legal fiscal/social exceptions and any personal guarantees you may have given.
Is there a CFE exemption?
Yes, the first calendar year of creation if you file the 1447-C-SD on time. Permanent exemption if revenue ≤ €5,000.
Sources
- Separation of the individual entrepreneur’s assets — entreprendre.service-public.fr
- Individual entrepreneur: what you need to know — entreprendre.service-public.fr
- Micro-enterprise: thresholds and consequences of exceeding them (updated 2025) — entreprendre.service-public.fr
Last updated: 2025-09-30. This content is informative and does not replace personalized professional advice.