What are the exemptions in urban areas to be revitalized (BUD)?

Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)

Small or medium-sized companies (SMEs) that set up a business in a BUD: titleContent between 1er January 2018 and December 31, 2026 are eligible for tax exemptions. These relate to income tax, company property tax (CFE), company value added tax (CVAE) and property tax. These exemptions apply regardless of the company's tax regime (micro-company, simplified real or ordinary real).

Which municipalities are concerned?

A company set up in an urban catchment area (BUD) may benefit from total and then partial exemption from income tax (IR) or business tax (IS).

The company must be established there between 1er January 2018 and December 31, 2026 and conduct its activities there.

The municipalities classified in a BUD are located in the departments of Nord and Pas-de-Calais.

What are the conditions for the exemption?

In order to benefit from an exemption from income tax, the company must meet certain conditions which are different when the company's activity is non-sedentary. This is the case when the activity is largely carried out outside business premises, for example at the customer's premises or in public spaces (building contractors, babysitting and personal services, commercial agent, street trader, taxis, etc.).

General case

In order to benefit from this exemption, the company must all conditions following:

  • Being a SMB engaged in an industrial, commercial or craft activity
  • Created between 1er January 2018 and December 31, 2026
  • Have its head office and all its activities located in the BUD
  • Have unheld capital, directly or indirectly, for more than 50% by other businesses
  • Not result from a takeover, transfer, concentration, restructuring or extension of pre-existing activities
  • Respect a local employment clause: at least 50 % of the company's employees in DTA: titleContent or CSD: titleContent at least 12 months resident in the BUD

Warning  

Companies whose income falls within the categories of non-commercial profits (NBC) and agricultural profits (BA) are excluded from this exemption scheme.

Non-sedentary (or mobile) activity

In case of exercise of a non-sedentary activity, the office located in the BUD may have only an administrative function.

The company must complete all of the following conditions :

  • Being a SMB engaged in an industrial, commercial or craft activity
  • Exclusive BUD implementation of the registered office, of all activities and means of operation company with 85% minimum turnover in the BUD
  • Created between 1er January 2018 and December 31, 2026
  • Disposing of company capital is not held, directly or indirectly, for more than 50% by other businesses
  • Not result from a takeover, transfer, concentration, restructuring or extension of pre-existing activities
  • Respect a local employment clause : at least 50% of the company's employees in DTA: titleContent or CSD: titleContent at least 12 months resident in the BUD

Warning  

Companies whose income falls within the categories of non-commercial profits (NBC) and agricultural profits (BA) are excluded from this exemption scheme.

What is the exemption?

A company located in a BUD may benefit from an exemption from income tax. We are talking about a preferential system.

The income tax exemption is total to be counted date of creation and until the end of 23e month after the company is created.

The Next 3 years, the company benefits from deductions following:

  • 75% 3re year
  • 50% the 4e year
  • 25% the 5the year.

Future heads of company can ask the tax administration whether the company can benefit from the tax relief scheme. The request must be addressed by post, under registered post with acknowledgement of receipt, or deposed with the company Tax Service (SIE) against discharge.

Who shall I contact

Such consultation of the administration shall be prerequisite the creation of the company.

The administration has 3 months to respond.

How do I get the exemption?

The company that meets the conditions must postpone the amount of exempt profit on its statement of result. This income statement differs according to the tax system of the company: actual taxation system, simplified system of taxation or micro-company system.

Where the company is eligible for other exemption schemes, it must make an election. In order to benefit from the exemption scheme in a BUD, it must then opt for this exemption scheme within 6 months of starting business. This option results in the final waiver of the other schemes: Defense Restructuring Areas (DRAs), young innovative company (JEI), Rural Revitalization Areas (RRZs), urban free zones-entrepreneur territories (ZFU-TE).

The option is sent to the company Tax Service (SIE) on which the company depends.

Who shall I contact

One SMB exempt from income tax may also benefit from temporary exemption company property contributions (CFE) and company value added contributions (CVAE) from the year following its establishment.

The company must be implanted in the BUD: titleContent between 1er January 2018 and December 31, 2026 and conduct its activities there.

CVAE and CFE Exemption Mechanism

This exemption concerns the establishment of establishments, i.e. any new establishment of a company where it does not result from a transfer of activity and does not constitute a change of operator.

It exists 2 types of exemption :

  • Exemptionautomatic (de jure) relating to the half the value of the property imposed on the CFE. She's total for 7 years from the year following that in which the establishment was established. For the next 3 years, the net taxable base of the last exemption year is subject to the deductions following: 75% 8e year, 50% 9e year, 25% 10e year.
  • Optional exemption relating to the other half of the taxable amount. It may be decided on the basis of the deliberations of the municipalities and EPCI: titleContent. It is total for 7 years and then a reduction is applicable for the following 3 years. This deliberation of optional exemption from CFE extends to the CVAE.

Please note

These exemptions also apply to the CVAE.

Application for exemption from CFE and CVAE

The company shall claim exemption of CFE and CVAE for each establishment with the company Tax Office (SIE) on which it depends.

Who shall I contact

That request is being made before 1er May the year following the year in which the establishment was established.

One SMB, owner of a building situated in a BUD: titleContent, may be exempted from property tax on built property (TFPB) from the year following its establishment.

The company must be implanted in the BUD between 1er January 2018 and December 31, 2026 and conduct its activities there.

It exists 2 types of exemption :

  • Automatic Exemption (or of right) in respect of half the value of the property taxed. She's total for 7 years from the year following that in which the establishment was established. For the next 3 years, the net taxable base of the last exemption year is subject to the deductions following: 75% 8e year, 50% 9e year, 25% 10e year.
  • Optional exemption for the other half of the tax base. This exemption applies if the municipality and the EPCI: titleContent with their own tax system have voted for it. It applies for 7 years, then for the next 3 years it takes the form of the following reductions: 75% 8e year, then from 50%9e year and 25% 10e year.

Form No. 6766-SD to benefit from the exemptions must be sent to the company tax office (SIE) on which the company depends.

Claiming the benefit of the arrangements in favor of certain buildings located in an urban basin to be revitalized for the property tax on built-up properties

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