Flat-rate final payment — opting in, computing, opting out
The flat-rate final payment is an OPTIONAL way of handling income tax that a French micro-entrepreneur may choose instead of being subject to withholding at source. Income tax and social security contributions are then rolled into a single payment, made monthly or quarterly depending on the frequency chosen, and the tax is worked out by applying a rate directly to the turnover excluding VAT that is reported — 1% for retail, catering and accommodation excluding furnished letting, 1.7% for other commercial activities. Two conditions govern access: a household reference income for year N-2 below a threshold that depends on family circumstances, and an option declared to the social security collection agency on a strict timetable — before 30 September of the previous year, or before the last day of the 3rd month following setting up.
Up to date for 2026 — verified on September 11, 2026Official procedure, no printed formGuide: about 25 min
Deadlines
- Before 30 September of the previous year
- The option is declared to the social security collection agency — or to the general social security funds overseas — before 30 September of the year preceding the one in which the scheme is to start applying. A request made before 30 September 2026 applies to income received from 1 January 2027.
- Before the end of the 3rd month following setting up
- Where the business was set up during the year, the option must be exercised before the last day of the 3rd month following the month of setting up. An activity started in September 2026 must opt in before 30 December 2026.
- Leaving: also 30 September
- Withdrawing follows the same rules: the request goes to the collection agency no later than 30 September of the year preceding the one from which the option is to stop applying.
- Payment frequency
- Tax and social security contributions are settled in a single payment, monthly or quarterly depending on the frequency the micro-entrepreneur chose.
Documents to prepare
- The household reference income for year N-2 and the make-up of the household
- The nature of the activity, which settles the 1% or 1.7% rate
- The frequency chosen for reporting and payment: monthly or quarterly
- The date the business was set up, if you opt in during the first year
- Access to the collection agency's online account to declare the option and report turnover
- The annual 2042-C PRO return, to be completed in the box specific to the scheme
No form is attached to this procedure: the link leads to the official page that describes it.
What this page gives you
The guide above and the link to the official site. ActioFin does not produce any document for this page: whatever you fill in or file is done on the official medium.
Who this applies to
- Micro-entrepreneurs who prefer not to be subject to withholding at source and would rather settle tax as turnover comes in
- Micro-entrepreneurs whose household reference income for year N-2 stays below the threshold matching their family circumstances
- People setting up, who have their own deadline for opting in
- Micro-entrepreneurs already under the scheme who wish to leave it and return to withholding at source
- Micro-entrepreneurs whose reference income has passed the threshold, and who can no longer opt in
Worked example
Example: Nadia, a service provider, compares and opts in during September
Nadia provides commercial services as a micro-entrepreneur. Her household reference income for year N-2, as part of a couple with one child sharing the same tax household, is €61,000 — below the €73,947.5 threshold matching her circumstances. So she can opt in. She declares the option to the collection agency before 30 September 2026: the scheme will apply to income received from 1 January 2027. As her activity falls among other commercial activities, her tax will be worked out at 1.7% applied directly to the turnover excluding VAT she reports each quarter, and settled in the same payment as her social security contributions. She will nonetheless report that turnover a second time, in her annual 2042-C PRO return, in the box for micro-entrepreneurs who opted for the flat-rate final payment — with no second charge to tax: it simply lets the administration know the household's whole income and set the reference income. Were a quarter to pass with no turnover, she would owe neither tax nor contributions, but would still have to report, entering nil.
How to fill it in, step by step
- Check the threshold condition: your household reference income for year N-2 must be below €29,579 for a single person, €59,158 for a couple sharing the same tax household, €73,947.5 for a couple with 1 child, and €88,737 for a couple with 2 children.
- Identify the rate that will apply to your turnover excluding VAT: among commercial activities, 1% for retail, catering and accommodation excluding furnished letting, and 1.7% for other activities — commercial services and classified furnished letting in particular.
- Choose your frequency, monthly or quarterly: it will govern both reporting and the single payment rolling tax and contributions together.
- Declare the option to the collection agency, or to the general social security funds overseas, before 30 September of the year preceding the one in which it is to apply.
- If you set your business up during the year, opt in before the last day of the 3rd month following the month of setting up.
- Report your turnover periodically to the collection agency and settle on that occasion, in a single payment, the tax and social security contributions on the income reported.
- Report a second time, annually, on the 2042-C PRO form, in the box for micro-entrepreneurs who opted for the flat-rate final payment — that second return gives rise to no second charge to tax.
- Also enter in that annual return any gains or losses on the disposal of assets used in the business.
- To leave the scheme, send your withdrawal to the collection agency no later than 30 September of the year preceding the one from which the option is to stop applying.
The form, line by line
- Reference income for year N-2
- It is the tax household's income for the year before last, and not the micro-business's turnover, that governs access to the option.
- Thresholds by family circumstances
- €29,579 for a single person, €59,158 for a couple sharing the same tax household, €73,947.5 for a couple with 1 child, €88,737 for a couple with 2 children.
- 1% rate
- For retail, catering and accommodation activities — EXCEPT furnished letting.
- 1.7% rate
- For other commercial activities, notably commercial services and classified furnished letting.
- The 2042-C PRO box
- Turnover goes in the box for micro-entrepreneurs who opted for the flat-rate final payment — not the same box as for a micro-entrepreneur under withholding at source.
- Nil turnover
- No tax and no contributions to pay, but the return remains COMPULSORY: nil must be entered in the turnover box.
Good to know
- The scheme gives rise to NO year-end adjustment: tax is settled as reported turnover comes in, which is both its simplicity and its risk.
- It shares with the standard micro tax regime the turnover thresholds and the accounting duties: it differs on how tax is CALCULATED and PAID.
- Reporting income in the annual return after already reporting it during the year gives rise to no second charge to tax: it lets the administration know the household's whole income and set the reference income.
- The accounting duties remain: reporting turnover periodically and annually, keeping the receipts book or purchases register, giving customers an invoice carrying all required particulars, and holding a bank account — a dedicated business account becoming compulsory above a certain turnover.
- Passing the reference income threshold closes the option for the future: the micro-entrepreneur can no longer opt in.
- Both the option and its withdrawal are declared to the social security collection agency, not to the tax administration — one of the most common sources of error.
Common mistakes
- Comparing the threshold with turnover: it is the household's REFERENCE INCOME for year N-2 that governs the option.
- Opting in after 30 September expecting immediate effect: the option takes effect on 1 January of the following year.
- Missing, on setting up, the last day of the 3rd month following the month of setting up.
- Sending the option to the tax administration: it is declared to the social security collection agency, or to the general social security funds overseas.
- Applying 1% to a commercial service: that rate covers retail, catering and accommodation, excluding furnished letting; other commercial activities are at 1.7%.
- Not filing the annual return after paying periodically, fearing double taxation: the second return taxes nothing, it sets the reference income.
- Reporting nothing in a month or quarter with no turnover: the return remains compulsory, with nil entered.
- Forgetting to enter gains or losses on the disposal of assets used in the business in the annual return.
- Assuming leaving the scheme is immediate: withdrawal follows the same timetable as the option, no later than 30 September of the previous year.
Frequently asked questions
What is the flat-rate final payment?
An optional way of handling tax that a micro-entrepreneur may choose instead of being subject to withholding at source. Income tax and social security contributions are settled in a single payment, monthly or quarterly.
What income conditions apply?
The household reference income for year N-2 must be below €29,579 for a single person, €59,158 for a couple sharing the same tax household, €73,947.5 for a couple with 1 child, and €88,737 for a couple with 2 children.
What rates apply?
Among commercial activities, 1% for retail, catering and accommodation excluding furnished letting, and 1.7% for other activities — commercial services and classified furnished letting in particular. The rate applies directly to the turnover excluding VAT reported.
When must the option be exercised?
Before 30 September of the year preceding the one in which the scheme is to apply, or, where the business is set up during the year, before the last day of the 3rd month following the month of setting up.
Is an annual return still required?
Yes. Income is reported twice: periodically to the collection agency, and annually on the 2042-C PRO form, in the box reserved for micro-entrepreneurs who opted in. That second return gives rise to no second charge to tax.
How do you leave the scheme?
By sending a withdrawal to the collection agency, on the same terms as the option, no later than 30 September of the year preceding the one from which the option is to stop applying.
Go further
Compute the related amounts
Understand this form: the related course
Official sources
- entreprendre.service-public.gouv.fr — Micro-business tax regime: definition of the flat-rate final payment as an optional mechanism for those who prefer not to be subject to withholding at source, features shared with the standard micro tax regime (turnover thresholds, accounting duties) and the differences on calculation and payment, tax and contributions rolled into a single monthly or quarterly payment, rates of 1% for retail, catering and accommodation excluding furnished letting and 1.7% for other commercial activities, double reporting periodically to the collection agency and annually on the 2042-C PRO with no second charge to tax, duty to report nil where there is no turnover, reference income thresholds for year N-2 (€29,579, €59,158, €73,947.5, €88,737), the option's terms and timetable with the collection agency or the general social security funds (30 September of the previous year, or the last day of the 3rd month following setting up) with their dated examples, the box to complete on the 2042-C PRO, and the terms for withdrawing from the option — September 11, 2026
- entreprendre.service-public.gouv.fr — Income tax withheld at source: employer's obligations (checked 6 February 2026): the regime the flat-rate final payment allows one to escape — a self-employed person's income is not collected at source and gives rise to instalments computed by the tax administration from the previous year's declared income — September 11, 2026
Guide and document provided for information purposes only; they do not constitute personalised legal or tax advice. Check the recipient organisation's requirements and consult a professional if needed.