Taxation in France applies to any company incorporated in France or any foreign company managed and controlled from France. Residents and non-residents are taxed on their income derived from activities performed in France. French residents with a foreign-source income are generally not taxed.
The most important types of legal entities in France which are subject to taxation are the joint stock company, the limited liability company, the commercial partnership and the branch. Our French lawyers
provide complete assistance and accounting services for your business in France
Corporate taxation in France
The main types of taxes in France
applicable for companies are the corporate income tax
, the social surcharge, the business tax, the value added tax (VAT), withholding taxes, registration duties and social contributions.
The standard value of the corporate income tax in France is 33.33%. Branches in France benefit from a 30% rate (applicable for branches of non-EU entities) and they can benefit from further reductions or even a complete elimination of this tax under specific treaties. The surtax in France has different values, depending on the value of the income tax. The social surcharge has a value of 3.3%.
Interests and royalties and not subject to withholding tax in France. Dividends paid by a French company to a non-resident shareholder are subject to a 30% withholding tax. Dividends paid by French companies to a qualifying EU parent company are exempt from the withholding tax. A participation exemption applies in France under certain conditions.
Other taxes applicable to French companies are:
- the capital duty,
- the payroll tax,
- the real property tax,
- social security contributions and others.
Our lawyers in France
can offer you a complete and detailed list of the applicable taxes for any kind of business in France.
Personal taxation in France
French residents are taxed on their worldwide income and non-residents are taxed only on their French source income. Any individual who has the primary residence in France is considered a French resident. Married couples in France
can file a joint tax return.
The taxable income for individuals in France includes:
- the employment income,
- business income,
- real-estate income,
- investment income.
- capital gains.
Income tax rates in France are progressive, from 5.5% to 45%.
The value added tax (VAT) in France
has a value of 20%. It applies to the sale of any types of goods and services, however, certain reduced rates apply to foods products and preferential rates exist for medicines.
The tax year in France is generally the same as the calendar year. Income tax returns must be filled by the end of May, for the previous tax year. Penalties apply for late filling.