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I am advised by a person living in the Real World that social contributions on the businessperson's salary may well reach 60+%. So presumably this is what is meant in the article (neither payroll taxes relative to her personnel, nor her personal income tax).

But it's optional to put yourself on the books as an employee of your own company. What you may gain by it is unemployment insurance - if your company fails, you'll be well covered for some time afterwards. What you lose is that the total rate of social contributions is high. A non-salaried businessperson pays lower rates on the same sum considered as non-salaried "remuneration". Berenice could halve her 68% by doing this.

However, win some, lose some: lower costs => higher company margin => higher company tax...

Up to about €38,000 profit, company tax is at 15%; thereover, at 33.33%. A small start-up like Berenice's might well wish to stay in the low bracket at first.

It's a question of jungling with these parameters.

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Mar 21st, 2007 at 04:03:23 AM EST
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