These 5 things will change for small business owners in France from September

If you’re a business owner, we do hope you’re among the 65% of France-based bosses who’ve given themselves a holiday this summer. There’s nothing like a vacay to recharge the batteries and preserve that all-important mental health that we talked about last month.

Whether you took time off or not, there are a few housekeeping changes to bear in mind for La Rentrée (what is the neat English translation for that, by the way?). To make any September blues more manageable, we’ve put together a handy summary of those adjustments to a freelancer or business owner’s admin.

Let’s take a look at what’s new.

There’s a full explanation of this change in another article, but here’s the tl;dr.

Since August 1, it’s no longer a legal requirement to print a paper receipt for customers following the sale of certain goods and services. The measure is part of the French government’s “anti-waste” campaign and was initially planned for January 1 before being delayed for 6 months. The change could impact small businesses in several ways:

Bookkeeping: paper receipts are often used by vendors to establish precise sales records. Those that have been doing this will need to find an alternative method for their bookkeeping.

Customer relations: French consumers are traditionally quite fond of paper receipts and frequently use them to check the price of what they’ve just bought or to keep an eye on their household budgets. For companies that sell to the general public, it may be worth asking customers if they want a receipt, just in case.

Businesses also use paper receipts as a means of communicating with returning customers, for example by using them to show how many loyalty bonus points the client has accumulated. The new, no-paper direction will require these companies to rethink how they relay such information and maintain the customer relationship.

Adopting new technologies: even if the new rule is not a major change to business practices, it’s another step on the path towards digitalization. In other words, it’s another good reason to start adopting digital processes to provide customers with proof of purchase. Things like digital receipts sent by email, or even mobile apps that can do the job for you.

Since July this year, all payslips must include a line that shows the net social amount (le montant net social) paid by employers. This figure is the net income after deducting all mandatory social contributions and serves as a common reference for all employees across the board. This obligation may mean some adjustments for HR departments and other payroll issuers.

For a start, it’s another payroll item to be displayed visibly on the payslip so business owners will need to ensure their payroll software is updated accordingly. If you haven’t already done this, be aware that the process of updating payroll software can take a few weeks and you’ll need to test it before launch.

Some payroll providers will have automatically taken this legal update into account, meaning you shouldn’t have to do anything. In any case, you should contact your payroll service provider to find out what, if anything, you need to do to remain legally compliant.

For employees, this change simplifies the process of obtaining their allowances or incentives paid by the government. Communicating this effectively can strengthen your employer brand. On the other hand, an error in displaying or reporting the net social amount could result in a financial penalty for your company, even if the error originated from the payroll software.

As a business owner, you’ve been entitled to a tax credit for costs related to training. The good news is that you’ll continue to enjoy those little tax breaks for any training undertaken until December 31, 2024, an extension of two years.

That gives you an extra incentive to book that course you’ve been thinking about and develop new skills to help you drive your business forward. And September is as good a time as any to browse new seminars and courses that training centers have added to their programmes.

France’s Madelin Law (La loi Madelin) deals with income tax for SMEs. More specifically, it provides tax benefits to the owners of those SMEs. Its objective is to protect non-salaried workers, who enjoy fewer social safety nets than their salaried counterparts.

Thanks to this law, any individual who buys capital in a company can get an increased tax reduction of 25% on this investment to help them build their private retirement fund. This has been renewed and is now valid until January 1, 2024, after which the tax reduction will fall back to 18%.

What does this mean for a business owner?

Fiscal benefits: the Madelin Law allows individuals who own a business to deduct from their taxable income any investments they have made towards complementary retirement or health insurance contracts. This can result in income tax reductions that are not inconsiderable.

Stronger social protection: *the law also helps *business owners *get *access to more comprehensive insurance contracts, giving them (or their families) more protection in case of disability, death or incapacity to work. These tax deductible insurance contracts complement the mandatory social security scheme, providing wider coverage for unforeseen circumstances.

Building retirement funds: As for the above life/health insurance, but for retirement insurance. Contributions to these private retirement schemes can still be deducted from taxable income. That means lower taxes now and extra income when retirement comes.

For more, in French, on the Madelin Law, check out the official Economy Ministry website.

From September 1, 2023, the minimum retirement age to benefit from a full state pension, currently 62, will rise by 3 months per year until eventually reaching 64 years of age by 2030.

The retirement law reform also includes higher pension contributions for both public and private sector employers.

There are other less talked-about provisions that will still impact businesses: for instance, a greater number of employees will be able to claim what’s known as the ‘professional prevention account’ (le compte professionnel de prévention or C2P). This scheme allows for employees whose job exposes them to ‘high-risk’ factors (extreme noise or temperatures, night shifts, repetitive physical tasks…) to take job conversion training, reduce their working hours or take early retirement. All employers will have to evaluate these risk factors for their employees and update this assessment annually.

For more details on the C2P, you can consult the government website (link in French).

Another measure is what’s called the ‘senior index’ (l’index senior). This is designed to protect workers aged over 55, who are proportionally under-employed in France compared to other EU countries. From November 1 this year, companies of 1,000 employees or more will have to publish annual figures showing how many over-55s are on their payroll. From July 1, 2024 this obligation will be extended to all companies with 300 or more full-time staff.

What does this mean for a business owner?

Companies may well have to adapt their HR policies to comply with the reformed retirement law. This could mean planning for longer working lives, accommodating more senior employees and giving them career flexibility through training. It could involve enhancing progressive retirement or cumulative employment-retirement schemes that make the transition between an active working life and retirement smoother.

For your bottom-line, it will also mean factoring new pension contribution rates into financial planning.

While the above administrative changes are already affecting businesses, or will very soon, there are others appearing on the horizon that will need to be dealt with in future.

Automation and dematerialization are not going away. In fact, they’re only likely to climb higher up the list of priorities for small businesses in the coming years. One big next step along this road is the introduction of mandatory electronic invoicing. This was due to start in July 2024, but the government has very recently announced (in July 2023) that it’s postponing the launch to an unspecified date. If you want to get ahead of the curve, here’s an article detailing all you need to know about mandatory electronic invoicing in France.

It’s a notion that has its share of both fans and critics. Whether you’re a believer or not, it’s worth considering your company’s position on the 4-day working week. Some business owners have already welcomed it with open arms and are delighted with a resulting bounce in productivity.

The 4-day week is not likely to become a legal requirement in France any time soon, but that doesn’t mean businesses can’t give it a try while they’re still free to adapt it as they wish. It’s an idea that’s gaining traction in several European countries, so definitely worth considering.

Customers, employees, and investors alike increasingly expect companies to pay closer attention to social and environmental issues. Specifically, business owners are under closer scrutiny to:

• Adopt sustainable business practices.
• Reduce their company’s carbon footprint.
• Promote social responsibility within their company.
• Meet growing customer demands in terms of sustainable products.
• Be transparent about their efforts towards the above.

Regulations are becoming stricter, too, meaning reporting on CSR will need to become more thorough and transparent; banks and investors are already having to give Environmental, Social and Governance (ESG) figures not just on their own activity but also on those of the companies they invest in.

From January 1, 2025, reporting on ESG performance will become mandatory for certain larger companies under the EU’s Corporate Sustainability Reporting Directive. It may not affect Europe’s SMEs just yet but it’s a clear indication of where the wind is blowing.