The France ruralités revitalization (FRR) scheme has 2 levels of tax benefits:

• Base Level ‘FRR zone’ for municipalities with less than 30 000 inhabitants located in a public intermunicipal cooperation institution (EPCI)), a department or living area that meets certain population density and income criteria. The classification of municipalities as an FRR zone is determined by a decree which enters into force on 1 July 2024 for 6 years.

• Enhanced “FRR +” level for the most vulnerable territories. The criteria are being developed. This level of zoning will take place from 2025.

All conditions the following must be combined to qualify for tax exemptions:

Create or resume a company

The FRR scheme shall apply to the creation and take-over of companies from 1^er July 2024 in these areas.

Company recovery is a change in the direction of a company. The trade-in date is the starting point for counting the exemption period.

In some cases, tax exemptions do not apply to:

• Activities benefiting or having benefited, during one or more of the five years preceding the year of creation or takeover, from other tax relief schemes (urban free zones (ZFU), young innovative companies (JEI), the employment areas to be revitalized (BER), the urban basins to be revitalized (BUD), Defense Restructuring Areas ZRD, etc.)
• The creation or resumption of activities or companies following the transfer, concentration (grouping of companies) or restructuring of activities previously carried on in the FRR zones except for the remainder of the period
• Resumption of activity or company within the family circle. However, the first take-back operation in favor of descendants of the transferor of the company may benefit from the tax exemption.
• Cases of takeovers or restructuring within the family circle resulting solely from a change in social form (exclusion of all forms of takeovers ‘by oneself’). Individual business For example, transformation of a company into a limited liability company (LLC).

Nature of the activity

The company set up or taken over must be engaged in industrial, commercial, craft or professional activities.

The opening of an office by a doctor, the installation of a craftsman, the opening of a franchise or a subsidiary (with fewer than 11 employees) may benefit from the tax exemption scheme of the FRR scheme.

Number of staff in the company

The company created or resumed must use less than 11 employees.

The number of employees is calculated for each financial year in accordance with the rules of social security law. For more details on the establishment plan, see the dedicated card.

Tax system

The company that was created or resumed must be subject to a actual taxation system of the results.

For commercial and craft activities, the company is subject to the actual taxation system results, which may be normal or simplified. In the case of liberal activities, it is the controlled declaration procedure which applies.

Exclusive location in FRR zone

The head office and all the activity and means of exploitation must be located in the FRR zone; this is the condition of exclusive location activity.

The tax exemption therefore applies where the activity is sedentary. On the other hand, where the activity is carried out outside the FRR zone, even on an ad hoc basis, the exemption is only applicable if the company has a turnover outside the FRR zone which does not exceed 25%. In this case, the exemption is maintained in proportion to the turnover in the FRR zone.

Companies who exercise non-sedentary activity may also benefit from tax exemptions under certain conditions. A non-sedentary activity is largely carried out by customers: this is the case of a construction company.

In order to benefit from tax exemptions, the share of the activity carried out outside the FRR zone must not exceed 25% turnover. The exemption will then apply only to the profit resulting from the activity carried on in the FRR zone.

Companies set up or taken over in the areas France ruralités revitalization (FRR) from 1 July 2024 benefit from a scheme exempting their profits.

Amount and duration of the income tax exemption

The income tax exemption is limited in time.

• The First 5 years, the exemption is total.
• The 6^e year, profits are taxed for 25% of their amount
• The 7^e year, profits are taxed for 50% of their amount.
• The 8^e year, profits are taxed for 75% of their amount.

The exemption from income tax must comply with the European de minimis aid rules. This allows tax relief provided that the total amount granted to a single company does not exceed €300,000 over a “slippery” period of 3 years.

Procedure for obtaining exemption

The company does not have to take any steps to benefit from the income tax exemption. She only has to indicate the amount of profit on its annual declaration of profit or loss.

For more details on the income tax return, you can refer to the income tax forms (in case of non-commercial profits (NBC) or in case of Industrial and Commercial Benefits (BIC)) and to business tax (IS).

Non-cumulation with other exemption schemes

If the company qualifies for several exemption schemes (Defense Restructuring Area (ZRD), urban basins to be revitalized (BUD), young innovative companies (JEI), rural business revitalization zones, etc.), it must make a choice. To opt for FRR zoning, it has 6 months after the start of activity. This choice is definitive.

The option must be notified to the EIS: titleContent of the company's reporting place.

Exemption decided by the municipality

The exemption of CFE in the FRR zone must be decided by a decision of the municipality or theEPCI: titleContent .

Companies entering the FRR zone may benefit from an exemption of company property tax (CFE). It's not systematic. Indeed, the municipality orpublic institutions for inter-municipal cooperation with own taxation (EPCI) shall take a decision on the principle of exemption.

Amount and duration of the CFC exemption

The exemption from CFE shall apply to:

• from the year following that in which creation of the establishment
• either from 2^eyear following that of the extension of an establishment.

This exemption is limited in time.

• The First 5 years, the CFE exemption is total.
• The 6^e year, theabatement is 75% of the tax base of the CFE.
• The 7^e the abatement is of 50% of the tax base of the CFE.
• The 8^e the abatement is of 25% of the tax base of the CFE.

Eligibility for the exemption must comply with the European rules on de minimis aid. This allows tax relief provided that the total amount granted to a single company does not exceed €300,000 over a “slippery” period of 3 years.

Procedure for obtaining exemption

In the case of establishment or change of operator, the company wishing to benefit from the CFE exemption must apply for it with Form n^o 1447-C-SD:

Initial Declaration 1447-C-SD (CFE)

In case of extension of the establishment, the exemption can be requested with the form n°1447-M-SD

Amending Declaration 1447-M-SD (CFE)

The exemption must be claimed from the company Tax Office (SIE) on which each company establishment depends.

Non-cumulation with other exemption schemes

The company may not combine the exemption from CFE with that of the priority areas of the city (QPV) or young innovative companies (JEI), etc.

If it qualifies to benefit from more than one CFE exemption scheme, it must opt for one or the other of these schemes. This option must be taken before 1^er January of the year in which the exemption takes effect.

This option is definitive.

Exemption decided by the municipality

Property tax exemption on built property (TFPB) is not systematic. It must be decided by a decision of the municipality or the EPCI .

This exemption applies to real estate situated in the FRR zones and connected to an establishment which benefits from the CFE exemption.

On the deliberation of the municipalities and EPCI: titleContent In these cases, an exemption from TFPB may be granted in favor of hotels, tourist furniture and bed and breakfasts.

Amount and duration of the TFPB exemption

The property tax exemption applies to the same extent and for the same duration as the CFE exemption. It shall start from 1^er January of the year following the attachment of the immovable to an activity qualifying for the exemption.

• The First 5 years, the exemption is total.
• The 6^e the abatement is of 75% the tax base of the TFPB.
• The 7^e year, the exemption is 50% the tax base of the TFPB.
• The 8^e year, the exemption is 25% the tax base of the TFPB.

Eligibility for the exemption must comply with the European rules on de minimis aid. This allows tax relief provided that the total amount granted to a single company does not exceed €300,000 over a “slippery” period of 3 years.

Procedure for obtaining exemption

The exemption applies to real estate situated in the FRR zones and connected to an establishment that qualifies for the CFE exemption.

In order to benefit from this exemption, the company must declare the identification details of the property at the property tax center of the location of the property before 1^er January of the year of exemption. and on a model established by the administration, the identification elements of the buildings.

For more details on the Property Tax Return for Built Properties (TFPB), see the dedicated card to this tax.

Non-cumulation with other exemption schemes

The company may not combine the exemption from TFPB with that of the priority areas of the city (QPV) or young innovative companies (JEI), job pools to be revitalized (BUD), etc.

If it qualifies for several TFPB exemption schemes, it must opt for one or the other of these schemes. This option must be taken before 1^er January of the year in which the exemption takes effect.

This option is definitive.