The corporate tax in France is levied on all the France-source profits made during a year by corporations and other legal entities. The companies that are fully liable for the corporate tax are those domiciled of managed in France. The standard 33.33% corporate tax in France has a surtax of 3.3% which leads to an effective tax of 34.43%.
The corporate income tax
is just one of the taxes companies must pay while doing business in France. Our French law firm
offers complete services for French companies, including tax management and tax minimization
Types of companies subject to corporate tax in France
The main types of companies in France are:
- the joint stock company (SA/SAS),
- limited liability company (SARL),
- commercial partnership (SNC)
- branch of a foreign company.
The 3.3 percent contribution applies to the part of the corporate income tax that exceeds 763,000 EUR, resulting in an overall maximum corporate income tax of 34.43 percent. Large companies that have a turnover of over 250 million EUR must pay an additional 10.7 percent temporary surtax. This means that the overall effective corporate tax for large companies is 36.9% or 38%.
Because France operates a territorial tax system
, residents and non-residents are subject to taxation based on the profits produced by a business in France or on an income generated from a French source. As such, if a company is opened in France or if a foreign company
is managed and controlled in France, then it is subject to corporate tax.
How does France apply the corporate tax?
The corporate tax in France, known as ”Impôts sur les societés”, is governed by the French company taxation system. This system makes a clear distinction between the income generated by the company and the income generated by the company owner. In case of the owner, the income is regarded as being salary and it is taxed using the personal income tax system that is also deductible in order to calculate liability to company tax.
In regards to the company income, the rate is calculated depending on the capital structure of the business as well as on the turnover. The net taxable profit of the company is the trading income and is calculated according to the yearly financial statements of the company.
The deadline for paying the corporate tax
In France, the fiscal year is generally the same as the calendar year. However the taxpayer can choose a different end date for the year. Usually the tax year has 12 months but can be shorter or longer in some cases. The corporate tax returns in France are due until 30 April, the following calendar year or within three months of the end of the year if the fiscal year is not the same as the calendar year. Late payments in France are usually subject to a 10% penalty.
Tax exemptions in France
There are cases in which companies are exempt from paying the corporate tax, but only if certain conditions are fulfilled. For example, regions, departments, municipalities, investment companies, housing or farmers associations, that have as the main scope making goods available to their members, fit into the tax exemption category.
Do you want to open a company in France? Contact our French lawyers and they will provide the necessary information. Our law firm in France will help you go through the entire process and offer you an easy way to start doing business in France.