10. Other Business Taxes in France

1. 10.1. Taxe Professionnelle - Business Rates
2. 10.2. VAT
3. 10.3. Payroll Taxes

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10.1. Taxe Professionnelle

The taxe professionnelle is a local business tax imposed by the departmental and regional councils to assist in the funding of local services, including the Chambres de Commerce/Metiers.

It can best be compared with the 'non-domestic rates' (often called 'business rates') that a business in the UK pays.

The formula for calculating the tax is probably only fully understood by those who administer the system. Broadly speaking, it is based on the value of property used by the business, plus a proportion of other assets.

A small business in one of the professions liberales (eg accountants, architects, artists etc) is taxed on 6% of gross earnings.

The actual rate of the tax (on property assets or earnings) varies by region but, whatever the rate, there is a general rebate of 16%.

If you have a small business that operates from home then the level of taxation may only be a few hundred euros a year, although in some areas the local councils have stated that a minimum amount of tax shall be payable.

There are a number of other more permanent or temporary from the tax.

The most notable of these for the smaller business is an exemption for tradesmen and farmers. Certain of the professions libérales are also exempt, notably those in one of the artistic professions.

There are also reductions and exemptions for companies located in development areas. In particular, if you relocate to a Zone de Revitalisation Rurale (ZRR) there are more general exemptions.

A new micro-entreprise or auto-entrepreneur business that elects to be taxed on the basis of the tax regime of micro-fiscal is also exempt for three years.

Even though a new company will be granted exemption in its first year (and possibly the second year by local decision), you will be sent a Form 1003 for completion in your first year in order for the assessment process to be carried out.

The tax is payable at the end of each year in December and can also be paid in two instalments or you can elect to pay monthly.

As always, you would be well advised to take accountancy advice or speak to your Centre d’impôts to establish the likely level of the tax for your business.

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