Business tax: companies concerned and tax rate
Verified 01 January 2023 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Finance
The business tax (IS) is levied on profits made in an annual year by companies operating in France. The company must file a return and pay the IS on set dates. IS can be increased by social contribution.
Mandatory tax
- Anonymous businesses (SA)
- Limited liability businesses (LLC)
- Share Sponsored businesses (CBS)
- Simplified Action businesses (SAS)
- Businesses of the Liberal Fiscal Year (LRS, LRS)
- Trade unions (except for their activities relating to the study and defence of the rights and interests of their members)
Optional tax
IS is an optional option for the following companies and businesses:
- EIRL: titleContent
- Individual Entrepreneur (IS); in this case, he opts for a assimilation to an EURL.
- Limited Liability Single company (EURL)
- General businesses (SNC)
- Participating businesses
- civil businesses having an industrial or commercial activity
- Businesses created in fact
FYI
LPIAs, individual entrepreneurs (Isis) and businesses of persons and assimilated persons may waive this option up to 5e year following the year in which it was exercised. The waiver must be notified to the tax office.
The company is taxable on profits made in France during the annual year. Profits earned abroad through branches are not subject to IS.
The amount of the profit to be reported each year is that realised in all its French establishments in the business.
Each business pays IS on its own profits.
However, in the case of an option for the group scheme (fiscal integration scheme), a parent business may include in its taxable profits those of its subsidiaries which it controls at least 95% of capital. The parent business then pays the IS on all the group's profits.
FYI
for financial years ended from 31 December 2019, profits from the operation of communications satellites by a company settled in France shall not be considered as profits made in France and shall therefore not be taxed on the IS.
For open exercises from 1to January 2022, the normal rate of IS is 25% on the full tax return for all companies.
A reduced rate of 15% is applicable to certain companies.
Non-profit organisations are subject to specific rates:
- 24% for income from property (e.g. real estate rentals, agricultural profits)
- 10% for income from movable property (bonds, for example)
The reduced rate of IS of 15% concerns companies that meet the following 2 conditions:
- CAHT: titleContent less €10 million
- Fully repaid capital held at least 75% by natural persons (or by a business applying this criterion)
The 15% shall apply until €42,500 benefits for SME: titleContent. Beyond this threshold, the benefit is taxed at the normal rate of the IS, i.e. 25%.
FYI
The €10 million of CAHT: titleContent shall be calculated by reference to turnover for a financial year or 12-month period.
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Speak with an advisor on Place des Entreprises- General Tax Code: Articles 205 and 205ACalculation and rate of the IS: taxable persons, exemptions
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