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Article: French Business Expenses: Keeping as much as you can
Thread poster: ProZ.com Staff
ProZ.com Staff
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Feb 8, 2008

This topic is for discussion of the ProZ.com translation article "French Business Expenses: Keeping as much as you can ".

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David Sirett
Local time: 03:02
French to English
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Except if you're thinking of buying property Apr 1, 2008

Just one cautionary remark. In the particular situation where you're thinking of buying a property, it might be useful not to deduct everything in sight for the two or three years preceding a loan/mortgage application, as banks will look at post-deduction, pre-tax income to determine borrowing capacity. If you zealously deduct all you can to minimize taxable income, you risk reducing the amount you can borrow.
Once the loan is obtained and you've moved into your new home, you can go back to deducting those twenty-mile car trips to the Indian take-away restaurant and flights for language immersion on Florida beaches!

David Sirett


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Catherine GUILLIAUMET  Identity Verified
Local time: 03:02
English to French
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Car fees deduction : barême kilométrique 2008 Apr 1, 2008

Hello all,
For those interested in the very complex issue of professional car fees deduction in France applicable to your 2007 earnings to be declared in 2008, please note that you can now find the official listing of the deductible amounts per horsepower, etc, here, on line :
http://droit-finances.commentcamarche.net/faq/sujet-164-bareme-kilometrique-2008-enfin-disponible
Hope this will help, and my apologies for my bad English
Bravo to N.M. Eklund for this article !
Have a nice day
Catherine Guilliaumet


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Catherine GUILLIAUMET  Identity Verified
Local time: 03:02
English to French
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Another service you may deduct Apr 1, 2008

... Water supply and wasted water treatment services.
Everything related to water is very expensive in France. So you are allowed to deduct the percent used during your working hours, which, as you know, may exceed 10 hours/day.
During working hours, you use water for - drinking - coffe/tea and ... toilets. Please, do not neglect this last category of use as it may contribute up to approx 50 liters a day (during working hours), i.e. approx 1 cubic meter/month.
In some towns you pay a first company for water supplying and a second one for wasted waters treatment, so don't forget to take into account both invoices.
Have a nice day

[Edited at 2008-04-01 08:28]


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itgtrans
Local time: 03:02
English to French
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An alternative that minimizes paperwork Apr 1, 2008

The article just goes to show just how complicated it can be to maximize your earnings when running a small business here in France. The time spent on accounting, tax and other paperwork can be considerable.

For anybody thinking of starting up as a translator in France, an alternative is the system known as "portage salarial".

This allows the translator to work independently, while being an employee of the portage company, which takes care of all the social security contributions and accounting matters, leaving him or her free to concentrate on his/her core business.

All portage companies not being equal, it's wise to shop around to find one that is reputable, and is a member of the SNEPS. Also, a portage company that has a network of regional hubs that meet regularly will provide a support structure for both the business and administrative aspects of being an independent worker.

Of course, every option has its advantages and drawbacks. However, the portage solution is one that should be condidered. It certainly works for me.


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N.M. Eklund  Identity Verified
France
Local time: 03:02
Member (2005)
French to English
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Advertising/Publicity expenses Apr 1, 2008

A big thanks to Marie-Céline GEORG who reminded me of another key expense you should not forget.... Advertising/publicity expenses.

For example, some of you may pay for a yellow pages ad, or to be included in some kind of directory.

And ,Thank you Catherine for your additions, you can add water and any other utilities you pay at home (see the Services section) but only in the percentage used professionally.

For example, if you have a 20m² apartment (which happens often in Paris), and your office space takes up 4m², then your professional space is one-fifth your apartment..... Therefore, you can deduct on-fifth electricity, internet, etc.

[Edited at 2008-04-01 15:34]


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N.M. Eklund  Identity Verified
France
Local time: 03:02
Member (2005)
French to English
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What's best for each Individual's situation Aug 22, 2008

David Sirett wrote:

Just one cautionary remark. In the particular situation where you're thinking of buying a property, it might be useful not to deduct everything in sight for the two or three years preceding a loan/mortgage application, as banks will look at post-deduction, pre-tax income to determine borrowing capacity. If you zealously deduct all you can to minimize taxable income, you risk reducing the amount you can borrow.
Once the loan is obtained and you've moved into your new home, you can go back to deducting those twenty-mile car trips to the Indian take-away restaurant and flights for language immersion on Florida beaches!

David Sirett


Hi David,
Thanks for your remark. It is too true what you say about preparing to take out a loan; strangely enough though, I was in the opposite situation!

Some of you may have heard of the Pret à Taux 0 or the Pret Paris Logement? They are two government funded assistance programs to allow people with lower incomes to buy an apartment or house with a limited loan at O% interest.

What is important to know about these loans is that you have to prove that you are UNDER a certain cap for yearly earnings. So, in this case it was absolutely necessary for me to deduct as much as possible. And it worked!

Also, I don't know if things have changed since 2006, but our banker decided that the expenses shown was not a true reflection of my resources and preferred a calculation based off of my Cost of Living. Not all bankers will do this, I guess only those who know you well and your saving/spending habits.


[Edited at 2008-08-22 15:05]


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N.M. Eklund  Identity Verified
France
Local time: 03:02
Member (2005)
French to English
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Portage salariale Aug 22, 2008

Hi itgtrans,
Thanks for mentioning portage salariale as an option. I know a few translators who are very happy with this option because it helps them concentrate on their work. There are many different companies out there offering different services, so if this interests you, you should definitely shop around first.

However, I'd like to specify a couple points which were brought up in a recent debate about Portage Salariale that everyone should think about when considering this option.

----------------

- for foreigners with a carte de sejour that renews every year, they will not be able to sign up use these companies because they must have a carte de resident, which will give them the right to be Employees.

- the average fee taken by the Portage salariale company is 10%. Generally, they will reduce their rate to maybe 7,5% if you earn more than 50 000 Euros HT. This means you can 'pay' them up to 4 999 Euros a year to take over all your administrative stuff. (assuming you're not earning more than 100 000 euros).

- the average fee taken by an accounting firm in Paris to take care of all your administrative stuff per year is 2000 Euros HT. (no matter how much you earn)

- to pay less in fees than with an accountant, you would have to earn less than 20 000 Euros HT. But, if you earned this amount, you are still in the Micro-BNC regime and 35% of your expenses are deducted automatically. No need to hire someone.

- accounts can get very complicated to maintain, especially when you have to keep up with VAT and quarterly declarations. There is a certain value in having an umbrella company do these tasks and never having to think about it!

----------------

For my personal situation, I preferred not to go with the Portage Salariale. I seriously considered it a few times but I found it too expensive with respect to the convenience value it brings. It is up to each person to decide what value they place on this convenience.

I generally keep 63% of what I earn, when all is said and done.
If I went through the Portage salariale, I would only keep 49%-55%, depending on the program I subscribe to. For some people, the difference is worth it, it's up to you to decide.

However, when the day comes that I want to pay for the convenience of having someone else doing my administrative stuff, I'd rather pay the cheaper 2000 Euros to an accountant, because on top of all else, he can deduct his fees for me!

(one reference for a portage salariale company : http://www.didaxis.fr/portage_salarial.php?gclid=CJGQsM3coZUCFQVItAodOFiNYQ )


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Sophie Dzhygir  Identity Verified
France
Local time: 03:02
Member (2007)
German to French
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Hi Natalia Dec 14, 2010

I just read your article for the first time today, hence my comments coming so late after publication.

I'll start with one detail: you can always deduct part of electricity, phone, water and the like. But rent (or taxes in case you own you own home) is not always deductible: you can deduct the percentage corresponding to your office only if that office is a separate room in your home. It means that if you live in a studio, T1 or T1 bis, you can't deduct the rent. That's what happened to me in the past.
So a freelance translator had better look for a T2 home at least.

[quote]One important thing you must remember is that as translators in France, the Impôt sur le Revenu (Income Tax) is not your worst enemy, the social contributions are. [quote]
Would you mind developping this idea? You assessed it in the article without further comment and it remaisn unclear for me, who think exactly the opposite (social contributions are something I benefit from, in the end).

Last but not least, I would like to know if you really deduct all your trips home in whole? I also practise that kind of deduction when I combine a private trip with a business trip, but my AGA insisted that I may only deduct the percentage corresponding to the business part. For instance, if I fly abroad for 7 days, including 2 days of professionel meetings or conference, and the ticket costs me 700 EUR, I will deduct only 200 EUR.


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