Representation expenses: choice between actual or flat-rate
In 2011, the French bar associations reached an agreement with the tax authorities(see the official circular on the Strada Lex website). This agreement aims to lump-sum certain expenses:
client gifts and hospitality (social events, similar professional obligations, including restaurant expenses)
office cleaning products
small office expenses
miscellaneous publications without invoice
These expenses are deductible up to 100% without justification! The flat-rate amount is calculated on income, according to 3 brackets: 3% on the 1st bracket of €34,500 of income, 2% on the 2nd then 1% on the 3rd bracket. For example, if your income is €40,000 or €70,000, you will receive a flat rate of €1,145 or €1,735. If your income exceeds €103,500, the flat rate no longer applies. In addition, a lump sum of €25 per day can be deducted for travel abroad.
Please note : if you apply this lump sum, you can no longer deduct the actual expenses covered by this lump sum.
💡 Applying the flat-rate lawyer's fee is a major simplification. The amount is limited, but its big advantage is that it's 100% deductible, and you don't have to justify it!