Taxes applicable to companies (CIT / IT / VAT / CET)
You are a company with business in France and you are wondering about your tax obligations in France.
You are a foreign company and you want to know if you are subject to business taxes in France.
TAXATION IN FRANCE
Companies with their registered office or a permanent establishment in France may be subject to business taxes in France.
A distinction should be made between various categories of business tax.
Taxation of company profit
A company’s profits may be subject to corporation tax (CIT) or income tax (IR) depending on the legal form of the company and its business activity.
The standard rate of corporate income tax is:
- 28% as of fiscal years beginning on or after 1st January 2020
- 26.5% as of fiscal years beginning on or after 1st January 2021
- 25% as of fiscal years beginning on or after 1st January 2022
A reduced rate applies to small and medium-sized enterprises (SMEs).
Value added tax (VAT)
Value added tax (VAT) is a general consumer tax applied to all goods and services consumed or used in France.
The main rates applicable are:
- the standard rate of 20%.
- the reduced rate of 5.5%.
- the reduced rate of 10%.
The territorial economic contribution (CET)
The territorial economic contribution (CET) consists of the corporate property tax (CFE) and the corporate value-added contribution (CVAE).
CFE is payable by companies and individuals who habitually exercise a self-employed professional activity, regardless of their legal status, business or tax regime. CFE is calculated on the basis of the rental value of any property assets subject to property tax. The amount of the contribution varies according to turnover.
CVAE is payable by companies, individuals or legal entities, with a turnover of more than €500,000 excluding tax (regardless of their legal status, business or tax regime) and operate a business that is liable for CFE. The standard rate of tax is 1.50% with a decrease for companies with a turnover of less than €500,000.
As tax rules are complex in France, the assistance of a tax lawyer may be required to ensure that your company complies with the applicable legislation.
- assistance and advice in the day-to-day management of your tax burden
- assistance in your project to set up business in France if you are a foreign company
- analysis of your reporting obligations and support for setting up procedures to ensure these obligations are met
- assistance in any exceptional operations affecting your company (restructuring, transfer of headquarters, setting up subsidiaries abroad, acquisitions, etc.)
- assistance in the event of an audit and/or tax dispute