In 2022, the standard corporate tax (IS) will be 25%, a rate which has been significantly reduced in recent years and is therefore an average rate within the European Union.
What other taxes apply to the company ?
The Invest in Bretagne team will introduce you to specialist accountancy firms who will be able to provide guidance on all tax matters.
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The tax regime applicable to you will depend on the nature of your investment project.
- Liaison offices, as a principle, which do not have any commercial activity, are not subject to tax.
- Subsidiaries or branches are liable to tax.
France, in principle, only taxes profits realised on its territory. In order to avoid that the same revenue is taxed in France and in the beneficiary’s State, France has signed tax conventions with over 120 countries.
Regarding the acquisition of shares in a French company, when the transaction is taxable in France, the purchase of French company shares is subject to registration duties, with varying rates depending on the type of shares acquired.
Depending on your project, different tax credits are available to you. For more information, go to the page “Can I benefit from local support ?“.
VAT is a neutral tax for businesses. Companies collect VAT from their customers and pay it back to the State, having deducted the VAT that the company itself paid to purchase goods or services.
The standard rate of VAT is 20% and applies to the majority of economic transactions. The VAT system is harmonised throughout the European Union.
Custom duties are only invoiced when the goods enter French territory. The goods can then circulate freely within the European Union without any specific procedure, except for the production of a Declaration of Exchange of Goods (DEB) or Declaration of Exchange of Services (DES) for statistical purposes. Mechanisms exist that allow for the exemption or suspension of VAT on the purchase of goods.
- The territorial economic contribution (CET) is limited to 3% of the added value produced by the company. It can be deducted from the corporate tax (IS) base. It is made up of 2 territorial taxes:
- Value added tax (CVAE), for companies generating a turnover higher than €500,000 ; rates are between 0 and 1.5% based on the added value produced.
- Business property tax (CFE), for companies generating a turnover higher than €152,500, based on the rental value of property assets, liable to a property tax.
- Company Social Solidarity Contribution (C3S), for companies with a turnover above €19 million ; rate : 0,16% of the portion of turnover above this amount ; deductible from the corporate tax base.
- Property Tax relates to property assets; corporate tax (IS) deductible.
If your company is a subsidiary of an overseas parent company, it can benefit from the tax consolidation regime, under certain eligibility criteria.
To find out more, go to our page “Can I benfit from favourable regimes to structure my investments in France ?“.
- Company tax simulator (for VSE- Very small enterprises)
- Dividend payment simulator (for French companies subject to IS)
- Tax4Business, service dedicated to French tax administration, to guide, help and inform foreign investors on the tax implications of their investment projects. Contact: email@example.com
- Make a French start – 10 insights to grow your business in France – The French tax environment, Business France – Mazars
Foreign Direct Investments and Partnerships Director
Tel : +33 2 99 25 04 08
Amélie LE GALL
Tel : +33 2 99 25 04 24