II. AS REGARDS SOCIAL CONTRIBUTIONS, THE PROBLEM LIES IN THE DISTINCTION BETWEEN PRIVATE INDIVIDUALS AND PROFESSIONALS
As regards social contributions, all income derived from professional activities is subject to social contributions and results in affiliation to a social security regime. However, a professional incomeas applied to income tax does not necessarily match with the definition of professional activityas regards social protection 19 ( * ) .
However, making the distinction between private individuals and professional workers is not easy . Indeed, although with regard to taxation, any income is in principle subject to income tax (see above), this is not the case as regards social contributions. The affiliation to the social security as a self-employed worker entails, for online platform users, significant consequences : the payment of social contributions of course, but also various procedures and obligations, including sector-specific areas.
A. AMONG PLATFORM USERS, MANY PROFESSIONALS ARE UNAWARE OF THEIR STATUS
1. Online platforms professionals: self-employed workers and micro-entrepreneurs
The professional self-employed workers 20 ( * ) of online platforms in principle contribute to the self-employed workerssocial security regime (RSI) , or otherwise the general social security regime 21 ( * ) .
Subject to their annual turnover not exceeding the thresholds of the micro-tax system and VAT exemption (see above), i.e. EUR 82,800 for sales of goods or 33,100 for services 22 ( * ) , these professional users can opt for the micro-entrepreneur system , which simplifies the formalities for founding a company, the payment of social charges and contributions at a flat rate, and optionally the payment of income tax or a fixed rate basis paid at the same time as the social contributions.
The micro-entrepreneur system: summary
|
Activities |
Examples of
|
Social contributions |
|||
|
Alone |
With payment in
|
||||
|
Micro
|
Sales of goods |
Purchase/resale,
|
13.10% |
14.10% |
1% income tax |
|
Services
|
Transport, rentals, DIY or gardening at home, etc. |
22.70% |
24.40% |
1.7% income tax |
|
|
Micro
|
Provision of services |
Creation of a logo, webdesign,
|
22.70% |
24.90% |
2.2% income tax |
|
Liberal profession activities |
Consultant, etc. |
22.50% |
14.10% |
2.2% income tax |
|
Source: URSSAF and Senate Finance Committee
During hearings held by the Working Group in different countries, it became clear that the micro-entrepreneur system was a very clear advantage in France for developing the economy collaborative in its professional part . In particular, this comment was often made during interviews conducted in Belgium (see below).
2. The discouraging complexity of moving from non-professional to professional status low-stake online activities
That said, the micro-entrepreneur system by definition relates to professionals: the issue is therefore knowing when exactly a user of online platforms who considers himself to be a private individual becomes a professional , and must accordingly join a social security system and comply with the declarative obligations and sector-specific rules.
However, currently, there is no criterion that is both simple and objective that can be used to distinguish professionals from non-professionals . Users therefore have no choice but to rely on complex criteria, criteria that are defined case by case and based on complex doctrine and case-law of which escape the vast majority of people.
In principle, any gainful activity carried out on a regular basis 23 ( * ) by a private individual is a professional activity , and results in compulsory affiliation to a social security system. The concept of a regularactivity does not imply any minimum in terms of income received, time spent or frequency of transactions or sales . Few but periodic actions may be a professional activity. Evidence of the activitys professional nature may be provided by any means; it can include the use of a tool of a professional nature, or the organisation of a sales channel. Generally, the doctrine and the Court use the highly subjective concept of the sellers intentionality .
In its report of May 2016 on collaborative platforms, employment and social protection, the General inspectorate of social affairs (IGAS) also emphasises the fact that no condition is linked to the duration of the work : affiliation and social contribution liability in principle apply to a casual job, a helping hand, that of an occasional job or of low importance such as a ”gig job. The sideline nature of an activity, predominant among collaborative workers, has no impact on the remuneration that is subject to social contributions .
It follows, of course, that a self-employed worker registered on a platform like Hopwork or Upwork , or a private hire driver using Uber or LeCab , must be affiliated to social security and pay contributions which is perfectly normal. However, it also follows that a person offering a few hours of DIY or looking after animals via a platform, or selling a few hats knitted at home, must in principle also be affiliated to the RSI (or where appropriate the general regime) in order to do so.
This obligation may apply even when the activity is purely amateur and just a sideline activity without any link to their main activity, and even if it produces only a few tens of euros of income per year or is a loss-making activity.
However, for someone whose activity on an online platform is only a sideline activity, switching from private individualto professionalstatus may well deter them they lose any desire to keep up the activity.
|
Self-employed workersobligations As a self-employed worker, the user of an online platform is subject to ordinary law and must pay social contributions, pay the Corporate land property tax (CFE) contributions to the Chamber of commerce and industry (CCI) or Chamber of Craft Trade (CMA) and the contribution to vocational training. Even more than the compulsory contributions, the administrative constraints, both general and sector-specific , may be the most dissuasive. A natural person carrying out a professional activity must indeed, among other things: - report the existence of their company, complete the incorporation formalities with a business creation centre; - register it in the Companies and Trade Register (RCS) or the Craft Trade directory (RM); - take out professional insurance; - open a bank account dedicated to the activity; - follow a course before establishing the company, which for the creation of a craft activity must be paid for; - obtain a qualification or professional experience for activities such as building, automotive, food, hairdressing and beauty parlors, all activities which, in certain forms, can be found on collaborative platforms; - comply with the obligations laid down by consumer law, health and safety standards, etc. Compliance with these obligations is controlled by the administrative authorities in their different fields : the Labour Inspectorate, the URSSAF 24 ( * ) , the DGCCRF 25 ( * ) etc. Source: Senate Finance Committee |
In any event, the law does not lay down any income threshold above which an activity must be regarded as professional . Certain informalthresholds are sometimes referred to 26 ( * ) , but they are impossible to verify and very fragile at the legal level. In the absence of simple and objective criteria, it is therefore the responsibility of the users of the platforms themselves, under the control of the inspection services and the courts, to determine on a case by case basis whether they actually carry out a professional activity.
However, the consequences are potentially very serious: reclassification as undeclared work would threaten the business model of many platforms, but conversely, the scarcity of controls allows activities to prosper under conditions of unfair competition.
In the physicalworld of jumble sales, car boot sales, amateur DIYers and services between neighbours, these rules were accepted for a simple reason: they were simply not applied, because they were not applicable. But the question becomes critical in the context of the platform economy , where these activities, until recently difficult to identify and control, have become massive, standardised and often traceable to the nearest euro.
However, as the IGAS rightly stresses, these activities generating small amounts of income cannot really develop with the same level of regulatory and social constraints as professional independent activities : the hidden administrative costs related to carrying out a professional activity [] as well as the level of compulsory contributions are significant compared to the income generated occasionally and from sideline activities . In other words, although the current rules do not pose any problem for realself-employed workers carrying out their activity via online platforms, they are at the very least discouraging for private individuals only seeking a modest supplement to their income: applying the rules would result in these new online activities losing their interest entirely , despite being a welcome boostfor many people, especially the long-term unemployed or those on low income, and not applying them leads to a situation of legal uncertainty which is detrimental to everyone . Obviously, it is this second situation which predominates and which needs resolving.
Therefore, the Working Group considers, like the IGAS, that the immediate challenge is to clarify the rules of affiliation to the social security of collaborative workers, taking their income into account under conditions of fair competition in relation to the traditional sectors .
* 19 Moreover, as regards taxation, Declaration No. 2042 C PRO on which the taxpayer reports his income includes distinct sections: professional BIC/BNC, and non-professional BIC/BNC.
* 20 The case of salaried workers using online platforms, who contribute to the general system, does not pose any particular problem. These are for example the drivers employed by licensed passenger transport companies (LOTI), home service company employees or employee sellers using marketplace platforms.
* 21 Either because they are affiliated to the general regime through their main activity, or because the law expressly provides for this affiliation. This is the case in particular for single shareholder companies (SASU), a status, commonly used by drivers working through mobility platforms like Uber.
* 22 Thresholds applicable to income for 2017. These have been revised. The thresholds stated above for the application of the micro-tax system alone, i.e. EUR 82,200 and EUR 32,900, are the thresholds applicable to income earned in 2016 and reported in 2017.
* 23 In accordance with Article L. 121-1 of the Commercial Code, which stipulates that traders are those who carry out acts of trade and make this their usual occupation . It should be remembered here that Article L. 110-1 of the Commercial Code considers that a commercial act is, in particular, any purchase of movable property for the purpose of reselling it as well as any movable property rental business . Reference to the Commercial Code is also used with regard to taxation, but the assessment is different
* 24 URSSAF - The organisation that collects social security and family contributions.
* 25 DGCCRF - Directorate-general for competition, consumer affairs and fraud prevention.
* 26 Thus, the activity would become regularstarting at EUR 500, and professionalabove EUR 1,500 to EUR 2,000 per month. Source: The collaborative economy caught up by the Labour Code, Le Figaro (newspaper) of 12 July 2015.