Leaving the micro-enterprise regime: procedure and consequences

Quick answer. You leave the French micro-enterprise regime when your turnover exceeds the ceiling (203,100 euros for goods, 83,600 euros for services) for two consecutive years. The switch to actual taxation takes effect on the following 1 January, with accrual accounting, VAT and contributions based on actual profit.

Leaving the micro-enterprise regime is not immediate. According to the rules in force in spring 2026, you lose the benefit of the micro regime when your turnover exceeds the applicable ceiling for two consecutive calendar years, namely in N-2 and N-1. The change of tax and social regime then takes effect on 1 January of year N.

An isolated overage, in a single year, is tolerated. The micro regime continues to apply the following year. This tolerance protects an exceptional year (a large contract, an activity peak) without immediately pushing the entrepreneur into a heavier tax environment.

The 2026 ceilings remain set at 203,100 euros for the sale of goods and accommodation, and at 83,600 euros for services and liberal professions, whether taxed as BIC or BNC income. Unclassified furnished tourist rentals fall under a separate ceiling of 15,000 euros.

Two separate threshold logics coexist, and this is a frequent source of confusion. The threshold for the micro tax regime (the flat-rate allowance) is not the same as the threshold for the VAT base franchise. You can perfectly well remain a micro-entrepreneur while becoming liable for VAT.

The VAT base franchise thresholds rest on article 293 B of the French Tax Code. The single threshold of 25,000 euros, planned by article 25 of the 2026 Finance Bill, was removed by Parliament and never came into force. We stress this point because many directors had wrongly anticipated it.

The transition is prepared, not endured. Here is the sequence we apply in our switching files.

1. Confirm the breach over two consecutive years. Compare your N-2 and N-1 turnover with the ceilings. Exit is automatic only after two years above the threshold.
2. Identify the effective date. The change of regime takes effect on 1 January of year N. In practice, you have the autumn and the N-1 closing to get organised.
3. Choose your actual regime. Simplified or normal actual regime: this choice drives the volume of accounting duties and the VAT filing rhythm. Our comparison of the simplified versus normal actual regime details the trade-offs.
4. Set up accrual accounting. A journal, a general ledger, an inventory ledger and annual accounts become mandatory.
5. Manage the VAT switch. Activate output VAT on sales and input VAT deduction on purchases, and adapt your invoicing.
6. Recalculate your contributions on actual profit. The base changes radically, as covered below.

A micro-enterprise versus actual BNC simulator lets you quantify the gap before committing, with your income and actual expenses in hand.

This is the most structural change. Under the micro regime, you kept a simple income ledger and, where relevant, a purchase register. Under the actual regime, article L123-12 of the Commercial Code requires chronological recording of movements affecting the assets, an annual inventory check of assets and liabilities, and the production of annual accounts comprising a balance sheet, an income statement and notes forming an indivisible whole.

Articles R123-173 et seq. of the Commercial Code list the mandatory books: a journal, a general ledger and an inventory ledger. The simplified actual regime eases these rules: by way of derogation, you may record receivables and payables only at the year-end closing and be exempt from the notes.

To secure this ramp-up, many directors entrust bookkeeping and review to a firm from the first year on the actual regime, the time needed to make the entries and the tax package reliable.

Two consequences weigh immediately on your cash flow.

On VAT, if you cross the upper franchise threshold (41,250 euros for services, 93,500 euros for goods), you become liable from the first day of the overage. You must then issue invoices with VAT, declare collected VAT, deduct input VAT on your purchases and professionalise your invoicing. Our article on the VAT threshold breach in self-employment details this crossing mechanism.

On social contributions, the calculation no longer rests on a percentage of turnover but on actual profit. Since the reform of the social base for the self-employed introduced by the 2024 Social Security Financing Act and applied from 2026, contributions are based on a single base equal to professional income reduced by a 26 percent allowance. The reference income remains capped by the PASS, set at 48,060 euros for 2026.

Several situations change the analysis.

• Voluntary exit to recover VAT. A craftsman making heavy investments sometimes has an interest in waiving the franchise to deduct VAT on purchases, even without crossing a threshold. The exit then becomes a choice, not a constraint.
• Liberal professions taxed as BNC. The micro allowance is 34 percent. As soon as your actual expenses exceed this rate, the actual regime (declaration controlee) can be more favourable well before the ceiling.
• Mixed activity, goods and services. The two ceilings combine: the total must not exceed 203,100 euros, of which a maximum of 83,600 euros of services.
• Minor entrepreneur. Capacity rules add to the tax regime; we cover this in our file on the micro-enterprise and minors.
• Closure rather than switch. If the activity declines, the exit may take the form of a deregistration, or even a simplified judicial liquidation in cases of genuine difficulty.

The underestimated risk lies in the cash-flow gap. Under the micro regime, tax and contributions follow collection. Under the actual regime, you are taxed on a profit that includes receivables not yet collected, and collected VAT must be remitted even if the client pays late. Many founders discover this working capital need at the worst moment.

A second point of vigilance: the effective date is rigid. You do not choose the 1 January of the switch, it follows from the two years of overage. Anticipating the N-1 closing is therefore essential to avoid entries reconstructed after the fact.

A third point the tax authorities watch: the consistency between turnover declared for VAT, the taxable result and the social base. Since 2026, professional income is reported in a specific social section of the tax package; an inconsistency between the returns draws attention.

Our reading is straightforward: leaving the micro regime is not a penalty, it is a change of scale that deserves a structuring decision. The real question is not only "how do I move to the actual regime?" but "should I stay a sole proprietorship on the actual regime, or form a company?".

The sole proprietorship on the actual regime remains taxed on income, simple and readable, but with no leverage on the director's pay. Moving to a company (EURL, SASU) opens corporate income tax, with a reduced rate of 15 percent up to 42,500 euros of profit, and the ability to arbitrate between salary and dividends. It is a different accounting world, but a different steering potential.

Recently, a director running a consulting activity approached us after two consecutive years above 83,600 euros. He believed he only had to "tick a box" to move to the actual regime. In reality, the cash-flow gap linked to VAT and the cost of contributions on actual profit led him, after simulation, to favour forming a company taxed on profits. The right decision was not the most obvious one.

As chartered accountants registered with the Ordre des experts-comptables, we recommend treating the micro exit as a project in its own right, not as a year-end formality.

Hayot Expertise tip. Launch the simulation from the first breach, without waiting for the second year. Compare three scenarios: sole proprietorship on the actual regime taxed on income, EURL taxed on profits, SASU taxed on profits. Secure the VAT cash flow and set the accounting calendar before the 1 January switch. Our team supports you on business taxation and, if needed, on company formation.