Agency Manager: “The State Took One-Third of My Earnings Until Retirement!” [ABO]

Iris was born in Andalusia to a Spanish father who is an architect and a French mother who works as a midwife. The second of three siblings, her older brother Jason is two years her senior.

In the year following her birth, her family decides to settle in France, in the beautiful city of Lyon, after a professional opportunity opens up for both parents.

It is in this splendid city, nourished by two rivers, that Iris grows up in a lovely apartment perched on the slopes of Croix-Rousse, within a close-knit and happy family.

During her childhood, the young girl naturally remains under her parents’ care. Until she turns 18, her needs are limited to basic necessities and a few leisure activities.

Based on an average annual consumption budget of 9,600 euros for 18 years, Iris thus paid 18,904 euros in VAT to the State on her consumption.

Once she becomes an adult, she decides to become a travel agent, her parents having passed on to her a taste for discovering civilizations and foreign cultures.

It is then that she chooses to pursue quality education at a business school renowned for its programs in Aix-en-Provence (I will not name it, but you will recognize it!). Coupled with an MBA, it is a total of five years of study that follow, giving her a solid foundation for her future career.

In order to relieve her parents financially, Iris works during school holidays, earning income that is exempt from tax and allowing her to have more financial ease. However, no social assistance is granted to her. Therefore, like every student, every cost is accounted for.

During these 5 years, her budget rises considerably and averages 2,800 euros per month, covered by her parents for 2,000 euros and 800 euros from her additional income.

It must be admitted that Iris already begins to travel, which weighs a bit on her budget but reinforces her in her professional choice.

During this five-year period, Iris has contributed 14,750 euros not indexed to the State in VAT on her consumption.

With her MBA in hand, the young woman begins to look for work and sends her résumé to cities near airports to better organize her own trips.

This is how she is selected by a tour operator in Annemac—oops, Annecy. A great position for her, being near Geneva and Lyon airports, which offers her many departure options.

It is in this company that Iris truly moves from theory to practice (even though she has already completed internships and occasional assignments while learning). Placed in a wonderful team, she discovers all aspects of the job over five years.

With a net monthly income of 2,200 euros that she spends entirely in her living expenses, she triggers her first income tax payment of 1,800 euros per year (9,000 euros over the period) and allows the State to recover 7,600 euros in VAT on the products of her consumption.

It is at this moment in her life that Iris decides to embark on creating a travel agency.

After searching for the ideal place to establish herself, Iris decides to set up her travel agency in Old Nice, where it is so pleasant to stroll before dining on a typically southern dish.

At the age of 28, the young business owner has very little savings, with all her budget going toward travel! She therefore seeks family and friends’ help, installation-assistance platforms, and, of course, a bank.

Having gathered the necessary funds, she launches the creation ex nihilo with taking a lease on a local, its fitting out, and she creates a pretty agency in Mediterranean tones after obtaining registration with Atout France, her financial guarantee, her management and invoicing tools, her website, etc.

And thus, from the age of 28 to 65, Iris will manage her agency with the ups and downs of fortune: global geopolitical crises, epidemics, staff management, IT issues, etc., but also her sources of enchantment, such as discovering new destinations with her referenced TOs, meeting clients, sharing experiences, etc.

The average income level for Iris during this period hovers around 2,800 euros net with occasional bonuses, bringing her total average net income over this period to 4,000 euros.

During her career, Iris will have enabled the State to collect 118,000 euros of VAT on her consumption as well as 228,000 euros of income tax.

Her company did not pay much corporate tax, except in the early years to build up working capital and repay loans, amounting to 40,000 euros.

In the meantime, Iris has met the person with whom she will have the chance to conceive Anaé, her only daughter, who today shares her love of travel without it having become a professional pursuit.

Unfortunately, that romantic partnership did not last, leading to a separation after 15 years of life together.

At 65, Iris ultimately decides to sell her travel agency for a substantial 300,000 euros. Benefiting from retirement-exemption provisions, she is taxed on this amount only for social contributions, at 18.6%, thereby escaping income tax of 12.8%.

The amount due to the State for her sale thus stands at 55,800 euros, leaving her with a disposable sum of 244,200 euros.

Owns her apartment, Iris then goes to her notary to plan its transmission to her only daughter Anaé, and to obtain a calculation of inheritance tax in case of death.

She informs him of her assets:

– a principal residence apartment valued at 380,000 euros and fully paid for after many years of loan repayments on a 20-year mortgage ;

– 520,000 euros in cash resulting from the sale of her business, savings (220,000 euros) and her parents’ inheritance (60,000 euros).

The notary informs her that she is entitled to only a 100,000 euro allowance for calculating inheritance tax, bringing the burden to 182,961 euros!

Thus stands Iris’s life-and-economy balance sheet: