French corporate tax rates depend on the legal structure, turnover and profit.
Companies in France are taxed either on income (impôt sur le revenu) or at corporate tax (impôt sur les sociétés) depending of the legal structure of the company. SA (société anonyme), SAS (société par actions simplifiée) and SARL (société à responsabilité limitée) are primarily subject to corporate tax, but may under certain circumstances, opt to pay income tax instead.
The normal corporate tax rate (taux normal) is 33.33 % for companies in France. This tax rate is applicable on companies:
- Whose annual profit exceeds 38.120 €,
- Whose annual turnover exceeds 7.630.00 € and
- Less than 75 % of the share capital is owned by natural persons.
This rate may be reduced (taux réduit) to 15 %, if:
- The profit is between 0 € and 38.120 €
- The annual profit is less than 7.630.000 €, and
- At least 75 % of the share capital is owned by natural persons, or by a company that fulfills above conditions.
If the company’s annual turnover exceeds 250 million €, an addition of 10.7 % (la contribution exceptionelle) shall be added to the normal tax rate. This is calculated on the terminated fiscal year.
The branch of a foreign company is required to pay corporate tax in France. A foreign company having only a representative office or a sales person in France is not required to pay tax in France. However, if such representative office of sale person carries out an independent activity (for example, signing contracts) on behalf of the foreign company, then such a foreign company may be required to pay tax in France.
If a company is having a deficit and is liable to pay corporate tax, the tax may be deducted from the next coming year’s profit. Yet, the period is not limited and the deficit may be postponed indefinitely.
The company may also choose to deduct this deficit from previous years’ profits with a time limit of three years. The company itself shall calculate the amount and shall pay subsequently in four installments: 15 of March, 15 of June, 15 of September or 15 of December the following year.
Do you have more questions about corporate tax in France or how you should set up your company on the French market? Please contact us at: firstname.lastname@example.org