1. Languages used by local tax authorities
French. Foreign documents should be translated in French when provided to French tax Authorities.
2. Main corporation tax characteristics
2.1 Corporate tax rate / additional taxes / global aggregate rate
The taxation of French companies relies on a territorial basis. Subject to specific anti-abuse provisions, French companies carrying on a trade or business abroad are generally not taxed in France on these profits and cannot offset the related losses.
For financial years that have ended on December 31, 2022, and for future financial yearsstarting on or after January 1st, 2022, the corporate tax rates are the following:
SME's | Turnover without VAT less than € 10M and at least 75% of the capital is held by individuals (or by a company satisfying this condition) | 15% up to € 42 500, and 25% above |
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Other firms | Regardless of the amount of the turnover | 25% |
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A specific surtax applies on the corporate income tax amount. It applies at a 3.3% rate on the part of corporate tax due exceeding € 763k (before offsetting tax credits granted under tax treaties). The surtax does not apply to companies having a turnover lower than € 7,63M if at least 75% of the company is owned by individuals or by a company satisfying this condition.
2.2 Corporate wealth tax
France does not have a corporate wealth tax.
2.3 Specific tax regime for dividends / interest / capital gains
Dividends are subject to French corporate income tax at normal rate (25%) except in the following cases:
- Parent company regime: dividends received by French parent companies (i.e. companies incorporated in France and holding qualifying shares that represent at least 5% of the issued capital of a subsidiary) are exempt from corporate income tax; 5% of the dividends net amount must be added back to the parent company’s taxable results. Therefore, the effective tax rate on such dividends is 1.33%.
- Consolidated group regime: dividends received by a French company from a member of a consolidated group are exempt from corporate income tax; 1% of the dividends net amount must be added back to the company’s taxable results. Therefore, the effective tax rate on such dividends is 0.27%.
Capital gains derived from the sale of fixed assets by French companies are subject to corporate income tax with other yearly profits at the standard rate.
Capital gains derived from the sale of qualifying shares that have been held for at least two years are exempt from tax, but the corporate income tax applies to 12% of the gross capital gains realized on qualifying shares. As a result, the effective tax rate on such gains is 3.18%.
2.4 Existence of exempt companies or companies subject to a reduced tax rate
French tax law does not provide for any general regime of exemption or taxation at a reduced rate.
Specific regimes of a reduced territorial scope may apply, subject to numerous conditions, to new companies established in specific geographical areas, can be exempt from corporate income tax for a limited period.
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