Fraud hits auto-entrepreneur scheme

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French Auto Entrepreneur Scheme

The French auto-entrepreneur scheme – no turnover= no social charges and no tax (Pas de chiffre d’affaires = pas de charges sociale ou fiscale) has been far more successful than ever anticipated – 320 000 auto-entrepreneurs registered in 2009 have overwhelmed the relevant government departments.

However the success has brought some indications of growing fraud.

Worse it is generating rising pressure from trades unions and sector pension schemes concerned at unfair competition (unions) and increased burdens on benefits (pension schemes).

La Dépêche de Midi newspaper reported that government was planning a tough crackdown on firms that abuse the auto-entrepreneur scheme by seeking to reduce or avoid social charges.

According to the report some small and medium enterprises are telling new staff they will only be hired if they set up their own auto-entrepreneur scheme and work as independent contractors. Government says it will make changes to stop the abuse but it strongly defends the scheme against union pressure, saying as a back-to-work scheme it has been an outstanding success.

Currently setting up as an auto-entrepreneur involves few formalities and is simply handled on the Internet. Payment of social charges and tax is also relatively painless and easily processed online through a very efficient website.

In one case of abuse of the scheme recounted by La Dépêche, a travel agency told would-be tourist guides and those already on the payroll they would have to convert to or be registered as auto-entrepreneurs. The firm told the guides that “due to technical problems with our accounting payroll we can no longer pay your social charges”!

If as an expat working in France you were thinking of becoming an auto-entrepreneur we’d suggest you move fast, before government is forced by fraudsters and retrograde union types to amend the scheme.

In our experience any changes would just mean more more paperwork more hassles and more hoops to jump through.

Get in there quick!

Useful Websites:
Official Government Auto Entrepreneur Website:

Good Auto Entrepreneur Website in English:

Story: Ken Pottinger

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