- Category: Taxes
Controlled declaration regime
The controlled declaration regime is the equivalent of the real tax regime for non-commercial profits companies (NBC).
Indeed, in a similar fashion to it, the entrepreneur is taxed on the profit he actually made (as opposed to the rules applicable under the micro-company scheme).
This regime is mandatory for companies with a revenue of over 70 000 € before taxes. Other companies can choose it as well, but it is optional.
Be careful! The turnover used to determine the tax regime of the controlled declaration is the one realized during the previous year or the year prior.
As such, the regime of the controlled declaration applies in 2018 to companies whose turnover of 2016 or 2017 exceeds 70,000 euros.
- The Taxable profit
- Accounting requirements
- Going from the micro-Company regime to the controlled declaration regime
The company must file a special declaration no. 2035 to the tax office before the 2nd working day following 1 May.
The taxable profit is calculated based on the fiscal year.
It is equal to the difference between the revenue collected during the year and the actual expenses paid.
Any deficits are deducted from other income and can be carried forward to the next 6 years.
The expenses that must be taken into account are those with a real and justifiable amount:
- installation or first establishment fees,
- purchases of supplies,
- business premises expenses: rent (1), lease-management fees,
- maintenance and repair costs,
- staff costs (salaries, social charges),
- retroceded fees, commissions and vacations (special declaration to be completed),
- purchases of materials and furniture,
- equipment rental fees,
- professional taxes,
- financial expenses (loan interest),
- exceptional expenses (bad debts, donations),
- travel expenses, automobile,
- meals (2), reception, insurance, etc.
( 1) In the case of a mixed lease, only the part of the rent corresponding to the professional activity can be deducted.
If the premises belong to the liberal professional: he is authorized to grant a lease to his company and to pay the corresponding rent (decision of the Council of State dated April 11, 2008 No. 287 808).
Be careful! this rent is a property income to be included in the income tax return.
(2) The cost of meals taken at the place of the exercise of the activity, because of the distance from the domicile of the entrepreneur, may be deducted for tax purposes. The deductible amount corresponds to the difference between the price of the meal (in the limit of € 18.60 for 2018) and the fixed value of a meal taken at home (valued at € 4.80 for 2018).
Additional details: Those having non-commercial profits have the option of having their income being determined by the principle of debt obligations and expenses incurred. The option must be made before February 1 of the year of the tax assessment.
New companies also have this option, but they lust make this decision before the filing date of the first declaration of profits.
The company must keep a journal detailing chronologically the revenues and expenses recorded daily.
When the revenue per product is less than 76€, they can be counted globally at the end of the day (proof must be produced).
People with a turnover below the VAT simplified tax threshold (€ 238,000) in the calendar year or the previous calendar year may enter income and business expenses on the basis of their bank statements, and not on a daily basis, provided that all transactions in the calendar year are recorded before 31 December.
The company must keep a register of fixed assets and depreciation, mentioning:
- the date of acquisition of fixed assets (or date of creation): equipment, customers, buildings, vehicles, etc.
- their nature and their price,
- the details of depreciation,
If they are ever sold: the date and the selling price.
Going from the micro-company to the controlled declaration regime
The decision to opt for the controlled return must be made within the deadline for filing the declaration of non-commercial profits for the year for which it is requested. Basically, it has to be done before the second working day following May 1 of the following year.
Thus, one can ask for this option until May 3, 2019 for the imposition on the controlled return from the revenues of 2018.
This option results from the subscription to the controlled declaration and does not require any additional paperwork.
It is valid for one year as long as the taxpayer remains within the scope of the tax regime of the micro-enterprise. It is automatically renewed for each year unless the taxpayer expressly renounces it before February 1 of the following year.
If you want to know more about company types and which tax regime they are eligible to, you can find all that out in these comprehensive tables.