France’s versement libératoire, explained for English speakers

First, how French income tax normally works for a micro-entrepreneur

France taxes income by household (foyer fiscal), not by individual. A married couple or civil partners file one return together, and the household gets a number of shares (parts): 1 for a single person, 2 for a couple, plus half a share for each of the first two children, and more after that. Income is divided by the number of shares, taxed on the progressive scale, then multiplied back.

For a micro-entrepreneur without the versement libératoire:

1. Each spring you report your year’s turnover on form 2042-C-PRO, part of the normal income tax return.
2. The tax office deducts a flat allowance for expenses: 71% for selling goods, 50% for commercial or craft services, 34% for liberal professions. You can’t deduct actual expenses on top.
3. What’s left is added to the household’s other income and taxed on the scale. For 2025 income, that scale is 0% up to €11,600 per share, 11% up to €29,579, 30% up to €84,577, 41% up to €181,917 and 45% above.
4. During the year, withholding instalments (prélèvement à la source) are taken based on your last known income.

The versement libératoire replaces steps 2 to 4 for your business income with a single flat percentage.

How the versement libératoire works

With the option, you pay income tax on the business as the money comes in, through the same monthly or quarterly declaration you already make to Urssaf for social charges. No allowance, no scale: just a rate on turnover.

No turnover in a month means no tax that month. You still report your annual turnover on the 2042-C-PRO: it isn’t taxed twice, but it’s used to set the tax rate applied to the rest of the household’s income (the taux effectif).

Who qualifies: the income cap, explained

The test uses your household’s revenu fiscal de référence from the year before last. You’ll find it on the first page of your French tax notice (avis d’impôt). Divide it by your number of shares and compare with the cap, which is the upper limit of the 11% bracket.

Two situations specific to people who moved to France:

• You weren’t filing in France two years ago. The test looks at a French reference income that you may not have. Before opting, ask Urssaf or your tax office how your eligibility will be assessed, and get the answer in writing.
• You still have obligations at home. The option only settles French income tax on your French business. US citizens, for example, are taxed on worldwide income and file a US return wherever they live. How France and your other country share taxing rights is set by tax treaties; an adviser who knows both systems is worth the fee.

When and how to opt

• When you start: tick the option when you register the business, or tell Urssaf by the last day of the third month after you start.
• Later: send the request to Urssaf before 30 September for the option to apply from 1 January. You do it from the secure messaging in your online Urssaf account, choosing the reason for the versement libératoire.
• Leaving: the same 30 September deadline applies to cancel it for the following year. The option also stops on its own if your reference income goes over the cap, or if you leave the micro-entrepreneur regime.

Otherwise it renews automatically each year. Urssaf is explicit that tax paid this way is final and won’t be refunded, even if you would otherwise have owed nothing.

Worked example 1: a single freelancer with modest income

Hannah, a British translator in Lyon (liberal profession), lives alone. Her only income is €30,000 of turnover. Illustration using the scale for 2025 income, the latest published.

Without the option:

1. Allowance of 34%: taxable income = €30,000 × 0.66 = €19,800.
2. Scale: 11% on the €8,200 above €11,600 = €902 before adjustments.
3. France reduces small tax bills with a décote: for a single person, €897 minus 45.25% of the tax, so €897 − €408.16 = €488.84.
4. Tax due: €902 − €488.84 ≈ €413.

With the option: €30,000 × 2.2% = €660.

For Hannah the option costs about €247 more. Much of her income falls in the 0% band, and the décote cuts the rest.

Worked example 2: a couple already in the 11% bracket

Mark, an American developer in Montpellier (liberal profession), is married to a salaried French teacher (2 shares). Her salary already puts the household in the 11% bracket, and Mark’s €20,000 turnover stays within it.

• Without the option: his turnover adds roughly €20,000 × 0.66 × 11% = €1,452 of tax.
• With the option: €20,000 × 2.2% = €440.

The real saving is a little smaller than €1,012, because his turnover still counts when setting the rate on his wife’s salary. But the option clearly comes out ahead.

Per €1,000 of extra turnover, at the household’s top rate (ignoring the décote and the taux effectif):

The pattern: little or no income tax, the option usually costs more; 11% or above, it usually saves. In between, run the official simulators on impots.gouv.fr or the Urssaf site with your own figures. Our French guide to the versement libératoire has the same calculations in French, handy to show an adviser.

Setting aside the right share

With or without the option, the habit that keeps French micro-entrepreneurs out of trouble is moving the right percentage out of every payment the day it arrives. Social charges and the versement are taken with each Urssaf declaration, monthly or quarterly; the rules are in our French guide to declaring your turnover. In Binome360, one sentence records the payment and the amount to set aside.

A yearly reminder on 15 September to review the option before the deadline takes one more sentence. Binome360 doesn’t calculate French tax or talk to Urssaf.

Frequently asked questions

What is the versement libératoire?

An option for French micro-entrepreneurs to pay income tax on their business as a flat percentage of turnover (1%, 1.7% or 2.2%), together with social charges, instead of through the annual tax return and the progressive scale.

What is the income limit for the versement libératoire?

Your household’s reference tax income from two years earlier must not exceed a cap per tax share: €29,315 per share for 2026 (2024 income) and €29,579 per share for 2027 (2025 income).

Is the versement libératoire worth it?

Usually, if your household is taxed at 11% or more on this income. Usually not, if you pay little or no income tax, since the flat tax isn’t refunded. Simulate both options with your own numbers.

What is the deadline to opt for the versement libératoire?

30 September for the following year, so 30 September 2026 for 2027. New businesses can opt when registering or by the last day of the third month after starting.

In short

The versement libératoire swaps France’s progressive income tax on your business for a flat 1% to 2.2% of turnover, paid with your social charges. You need a reference income under about €29,500 per share, and it pays off mainly for households already taxed at 11% or more. First step: find your latest French tax notice, divide the reference income by your shares, and run the simulation before 30 September.

Sources

• Service-Public Entreprendre, “Régime fiscal de la micro-entreprise” (versement libératoire, rates, income caps, deadlines, allowances), checked 13 May 2026: entreprendre.service-public.gouv.fr/vosdroits/F23267.
• Urssaf, autoentrepreneur.urssaf.fr, “Modalités d’adhésion au versement libératoire de l’impôt sur le revenu en 2026” (€29,315 cap, how to apply, no refund): autoentrepreneur.urssaf.fr.
• Service-Public Entreprendre, “Micro-entrepreneur : quelles sont les cotisations sociales ?” (2026 rates), checked 1 January 2026: entreprendre.service-public.gouv.fr/vosdroits/F36232.
• Service-Public, “Barème de l’impôt sur le revenu” (2025 income), checked 15 April 2026: service-public.gouv.fr/particuliers/vosdroits/F1419.
• economie.gouv.fr, “Pouvez-vous bénéficier de la décote de l’impôt sur le revenu ?” (€897, 45.25%): economie.gouv.fr.
• French Tax Code (Code général des impôts), article 151-0: legifrance.gouv.fr.
• IRS, “U.S. citizens and resident aliens abroad”: irs.gov.
• Binome360 calculations for the Hannah and Mark examples, September 2026.

Also available in Français.