Auto-Entrepreneur vs Georgia IE: Complete Tax Comparison 2026

The auto-entrepreneur (micro-entrepreneur) regime in France was introduced in 2008 to simplify self-employment. It succeeded at simplicity — a single flat rate for social charges, a streamlined declaration process, no mandatory accountant. But simplicity is not the same as affordability. The rates, while unified, remain brutally high for anyone trying to build meaningful savings on freelance income.

Georgia's Individual Entrepreneur with Small Business Status offers a genuinely different proposition: 1% on gross turnover, no social contribution mandate, and a revenue ceiling of 500,000 GEL (~€170,000) before any rate increase kicks in. This article compares the two regimes in detail, at multiple income levels, so you can see exactly where you stand.

Overview of Both Regimes

French Auto-Entrepreneur: How the Tax Works

As an auto-entrepreneur in France, you pay two main charges on your gross revenue:

1. Cotisations sociales: A flat rate calculated monthly or quarterly on your declared revenue. For service activities (prestations de services), the rate is 22.2% in 2026.
2. Impôt sur le revenu: Either via the versement libératoire (2.2% additional flat rate, available if your prior-year reference income was under the ceiling) or via the standard progressive income tax calculation at year-end.

If you elect the versement libératoire option, your total tax and contribution rate on gross revenue is: 22.2% + 2.2% = 24.4%. Simple. Predictable. But very expensive.

If you don't elect versement libératoire, you pay 22.2% in social charges during the year and calculate income tax separately the following spring. This produces a lower income tax bill in most cases (since the progressive scale taxes the abated income, not gross revenue) but creates a significant cash flow challenge — you owe a large income tax bill in September/October following the year earned.

Social Charges in Detail (22% — But Is It Really?)

The 22.2% headline rate conceals some important nuances:

What's included in the 22.2%?

The auto-entrepreneur flat rate bundles together contributions that, in the standard TNS regime, are itemized separately:

• Maladie-maternité (health insurance)
• Retraite de base (basic state pension)
• Retraite complémentaire (supplementary pension)
• Invalidité-décès (disability and death coverage)
• Allocations familiales (family benefit contributions)
• Formation professionnelle (professional training levy)

Notably, CSG/CRDS (generalized social contribution) is not included in the 22.2% for micro-entrepreneurs under the versement libératoire — but it is factored into the standard calculation. This is one reason why published figures for auto-entrepreneur charges vary between 21% and 24% depending on which elements are included.

What you get in return:

Social charges are not purely a tax — they fund social protections:

• Access to French health insurance (Assurance Maladie) for medical expenses
• Pension entitlements proportional to contributions
• Disability coverage
• Maternity/paternity allowances

However, auto-entrepreneur pension entitlements are notoriously low. At €50,000/year revenue over a 30-year career, a French freelancer might accumulate pension rights of €400–€600/month — far below a salaried employee at the same income level. The protection-to-cost ratio is widely criticized.

Income Tax on Top of Social Charges

For standard regime auto-entrepreneurs (not using versement libératoire), income tax is calculated on the following basis:

• An abatement of 34% is applied to BNC (non-commercial professions) revenue
• An abatement of 50% is applied to BIC services revenue
• The resulting taxable income is added to other household income and taxed at progressive rates

Example: €60,000 BNC revenue

• Abatement: 34% = €20,400
• Taxable income: €39,600
• Income tax on €39,600 (single, standard scale): ~€7,800
• Social charges: €13,320 (22.2%)
• Total: €21,120 = 35.2% effective rate

TVA Franchise and Its Limits

The franchise en base de TVA provides a VAT exemption for auto-entrepreneurs below:

• €36,800 for services (BIC/BNC) in 2026
• €91,900 for commercial activities (selling goods)

This threshold has barely changed in a decade while inflation has pushed many freelancers above it. A consultant earning €3,000–€5,000/month exceeds the €36,800 threshold easily. Once TVA is mandatory:

• You must charge 20% VAT on your invoices
• You file quarterly or monthly TVA returns
• Your prices effectively increase by 20% for B2C clients (you can't recover it from non-VAT-registered clients)
• Administrative burden increases significantly

The Ceiling Problem: What Happens at €77,700

The auto-entrepreneur regime for services (prestations de services BIC/BNC) has a ceiling of €77,700 in 2026. If you exceed this for two consecutive years, you are automatically moved out of the micro-entrepreneur regime and into the standard entreprise individuelle (TNS) regime.

Under the standard TNS regime, you lose the flat-rate simplicity. Social contribution rates typically increase to:

• ~16–17% for health (maladie, varying by income band)
• ~17.75% for basic pension (retraite de base)
• ~7–9% for supplementary pension
• ~3–5% for family benefits
• 9.7% CSG/CRDS on net income

Combined, the standard TNS rate on net income reaches 40–47% for most income levels — before income tax. A freelancer at €100,000 net profit under the standard regime might pay €40,000–€47,000 in social charges alone, plus €15,000–€20,000 in income tax.

In Georgia, there is no equivalent cliff. The Georgian IE rate stays at 1% all the way to 500,000 GEL (€170,000). Above that threshold, it moves to 3% — still dramatically lower than French rates.

Georgian IE with Small Business Status

The Georgian regime is deliberately simple. Here's what you pay:

• 1% of gross turnover, up to 500,000 GEL (~€170,000) per year
• 3% of gross turnover on revenue above the 500K GEL threshold
• No mandatory social contributions (you can opt into the Georgian pension voluntarily for ~300 GEL/yr)
• 18% VAT if your revenue exceeds 100,000 GEL (~€37,000) — similar threshold to France
• Monthly declaration and payment by the 15th of the following month

There are no expense deductions under Small Business Status. You cannot subtract rent, equipment, software subscriptions, or professional fees from your taxable turnover. The 1% rate applies to everything received. For most freelancers, this is far preferable to France's complexity — even if you have significant expenses that would reduce French taxable income, the difference in base rate is so large that the Georgian system wins overwhelmingly.

Side-by-Side Comparison at Multiple Income Levels

Note: France figures above the €77,700 ceiling assume the standard TNS regime applies. Figures include combined social charges and income tax. Individual circumstances vary.

What You Actually Keep: After-Tax Scenarios

Scenario A — €50,000/year consultant

• France: €50,000 revenue → ~€34,500 take-home (social: €11,100 + IR: ~€4,400)
• Georgia: €50,000 revenue → ~€49,500 take-home (tax: €500)
• Difference: +€15,000/year

Scenario B — €100,000/year developer (standard TNS in France)

• France: €100,000 revenue → ~€53,000 take-home (total charges: ~€47,000)
• Georgia: €100,000 revenue → ~€99,000 take-home (tax: €1,000)
• Difference: +€46,000/year

Scenario C — €140,000/year senior consultant

• France: €140,000 revenue → ~€70,000 take-home (charges + IR: ~€70,000)
• Georgia: €140,000 revenue → ~€138,600 take-home (tax: €1,400)
• Difference: +€68,600/year

Other Factors: Complexity, Benefits, Risk

Simplicity

Both regimes are simple relative to full corporate accounting. The French auto-entrepreneur requires monthly/quarterly URSSAF declarations and an annual income tax return. The Georgian IE requires a monthly turnover declaration and payment by the 15th. Neither requires a mandatory accountant, though both benefit from one above a certain income level.

Social Benefits

The French regime provides access to the French social safety net: health insurance, pensions, disability coverage. Georgia provides none of these automatically — you must arrange private health insurance and voluntary pension savings. Private health insurance in Georgia costs €50–€100/month for comprehensive coverage. Even accounting for this, the tax savings vastly outweigh the benefit value.

Stability and Legal Risk

Both regimes are stable and well-established. Georgia's Small Business Status has existed since 2012 and has been repeatedly confirmed by successive governments. The French auto-entrepreneur regime, despite various reforms, has survived since 2008. Neither regime carries unusual legal risk for compliant users.

Conclusion: Which Is Better?

For any French freelancer whose work is location-independent, the Georgian IE with Small Business Status is dramatically more favorable than the French auto-entrepreneur regime at virtually every income level. The break-even analysis is simple: if your annual savings in Georgia exceed the costs of living there (housing, insurance, flights to visit France), the move pays for itself.

At €50,000 revenue: saving €15,000/year in Georgia. Cost of excellent Tbilisi apartment + private health insurance: ~€8,000/year. Net gain: €7,000/year minimum.

At €100,000 revenue: saving €46,000/year. Extra cost of Georgia vs France (factoring in lower cost of living): you actually spend less in Tbilisi than Paris. Net gain: €46,000+ per year.

The comparison is not even close.

Frequently Asked Questions

What is the key difference between French auto-entrepreneur and Georgian IE?

French auto-entrepreneur: no revenue deductions allowed (abattement forfaitaire instead), charges sociales of ~22% on top of income tax (~20%+), total 35–45% effective rate above €50K. Georgian IE Small Business: 1% flat tax on gross turnover, no social contributions, no VAT under 100,000 GEL/year. The main trade-off is that Georgian IE requires genuine Georgian tax residency (183+ days/year in Georgia).

What is the revenue ceiling for French auto-entrepreneur in 2026?

For services (prestations de services BIC), the auto-entrepreneur revenue ceiling is €77,700 per year (2026). For professions libérales (BNC), it is also €77,700. Exceeding the threshold means you must transition to a standard entreprise individuelle or EURL/SASU structure, with full accounting obligations and a typically higher effective tax rate.

What happens to a French auto-entrepreneur who exceeds the €77,700 ceiling?

You are automatically re-registered under standard sole trader status and lose the simplified auto-entrepreneur regime. You must then maintain full double-entry accounting, pay charges sociales as a TNS on actual profits rather than revenue, and file full business income tax returns. The effective tax rate often increases substantially, making restructuring via SASU or EURL attractive.

Are there any deductions available for Georgian IE?

Georgian IE under Small Business Status pays 1% on gross turnover — not on profit. This means no business expense deductions are applied before calculating the tax. The 1% applies to every GEL of revenue regardless of expenses. This is a trade-off: the rate is so low that it is typically more favorable than any deduction-based system.

Is Georgian IE always better than French auto-entrepreneur from a tax perspective?

Below the auto-entrepreneur ceiling (~€77,700), Georgian IE at 1% is almost always lower in absolute tax — but only if you genuinely relocate to Georgia (183+ days). If you are not willing to relocate, the comparison is moot since you cannot legally use Georgian IE as your tax regime. Georgian IE is for those who want lower taxes AND are willing to change their country of residence.