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Business tax: companies concerned and tax rates

Verified 01 January 2023 - Legal and Administrative Information Directorate (Prime Minister), Ministry of Finance

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 SI on fixed dates. SI may be increased by social contribution.

Compulsory taxation

  • Anonymous businesses (SA)
  • Limited Liability businesses (LLC)
  • Equity Limited businesses (CAS)
  • Businesses by simplified actions (SAS)
  • Businesses of liberal practice (SEL, SELARL)
  • Professional unions (except for their activities in studying and defending the rights and interests of their members)

Optional Taxation

SI is an optional option for the following companies and businesses:

  • EIRL: titleContent
  • Individual entrepreneur (EI); in this case, he opts for a assimilation to an EURL.
  • single-member company with limited liability (EURL)
  • Businesses in a general name (CNS)
  • Businesses in participation
  • civil businesses having an industrial or commercial activity
  • de facto businesses

FYI  

IRLs, sole proprietors (SOEs) and businesses of persons and related persons may waive this option up to 5e financial year following that in respect of 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 financial year. Profits realized abroad through branches are not subject to tax.

The amount of profit to be reported each year shall be that realized in all its businesses establishments in France.

Each business pays IS on its own profits.

However, in the case of an option for the group scheme (tax integration scheme), a parent business may include in its taxable profits those of its subsidiaries at least under its control 95% capital. The parent business then pays the SI on all the group's profits.

FYI  

for the financial years ended from 31 December 2019, profits from the operation of communication satellites by a company settled in France shall not be considered as profits realized in France and shall therefore not be taxed on IS.

For open exercises as of 1er January 2022, the normal SI is 25% on the totality of the tax result for all companies.

A reduced rate of 15% is applicable for certain companies.

Non-profit organizations shall be subject to specific rates:

  • 24% for income from assets (e.g. rental properties, agricultural profits)
  • 10% for income from movable property (e.g. bonds)

The reduced SI rate of 15% concerns companies which fulfill the following 2 conditions:

  • CAHT: titleContent less than €10 million
  • Capital fully repaid and held at least 75% by natural persons (or by a business applying this criterion)

The rate of 15% shall apply until €42,500 of benefits for SMB: titleContent. Above this threshold, the profit is taxed at the normal SI rate, i.e. 25%.

FYI  

The limit €10 million of CAHT: titleContent is calculated by reference to turnover in a 12-month period or financial year.

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