Taxation

Upgrading of the cap allowing SMEs to benefit from the 15% business tax

Publié le null - Directorate for Legal and Administrative Information (Prime Minister)

The 2023 budget increases the cap for small and medium-sized companies (SMEs) to benefit from a reduced business tax (SI) of 15 percent. This now amounts to €42,500 of taxable profits.

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Image 1Crédits: © chaylek - stock.adobe.com

Business tax (IS) is levied on profits made in an annual year by SMEs operating in France. The standard SI rate is set at 25%. However, there is a reduced rate of 15% if the company does not exceed an annual profit cap.

For the first time since 2002, the 2023 budget increases this ceiling below which companies can benefit from a reduced SI. The increase in the ceiling is due to higher prices.

At 1er january 2023, ec reduced rate to 15 % now applies to SMEs with a profit below €42,500 (instead of € 38 120).

Beyond this ceiling, the profit is taxed at the standard SI rate of 25 % (for financial years from 1er January 2022).

Reminder

Companies wishing to benefit from this reduced rate of 15% must meet two conditions:

  • have a turnover of less than €10 million (excluding tax);
  • have a fully paid-up capital held by natural persons (or by a business applying this criterion) of at least 75 %.

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