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10. Other Business Taxes in France

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


10.1. Business Rates - Contribution Economique Territoriale (CET)

The Contribution Economique Territoriale (CET) is a local tax imposed by the departmental and regional councils on businesses to assist in the funding of local services and the Chambres de Commerce/Metiers.

The tax was introduced in January 2010, replacing the previously controversial form of business rates called the taxe professionelle.

The taxe professionnelle was a peculiar exception française.

The formula for calculating the tax was very complex. Broadly speaking, however, 20% of the tax was based on the rateable value of the property, and 80% based on the value of the capital machinery and equipment employed in the business.

As the tax weighed primarily on capital employed, the more a company invested, the larger its tax burden!

The abolition of the taxe professionnelle now effectively removes the second, preponderant element of the former tax, that based on capital equipment.

The Contribution Economique Territoriale (CET) is made up of two component parts:

  • The Cotisation Foncière des Entreprises (CFE), based the rateable value of the property occupied by the business.
  • The Cotisation sur la Valeur Ajoutée des Entreprises (CVAE), based on the ‘value added’ each year by the business - more or less the wealth created by the business each year, a figure which is also used to calculate liability to VAT.

So, CET = CFE + CVAE.

We do not consider the CVAE here as only those businesses with a turnover of greater than €500K are liable.

Local councils have the discretion to set a minimum level of rates, which is really aimed at to cover those circumstances where the business has no real estate.

The minimum rates depend on the level of turnover of the business and for 2014 they are:

  • Between €203 and €2,030 where the turnover of the business is less than €100,000.
  • Between €210 and €6,000 where the turnover of the business is greater than €100,000.


For 2015 the new bands are as follows, subject to the local council having made an appropriate resolution to do so:
  • Between €210 and €500 where the turnover of the business is less than €10,000.
  • Between €210 and €1000 where the turnover of the business is between €10,000 and €32,600.
  • Between €210 and €2,1000 where the turnover of the business is between €32,600 and €100,000.
  • Between €210 and €3,500 where the turnover of the business is between €100,000 and €250,000.
  • Between €210 and €5,00 where the turnover of the business is between €250,000 and €500,000.
  • Between €210 and €6,500 where the turnover of the business is greater than €500,000.

The reference year used for determining the turnover figure is two years prior to the year of imposition. So for rates payable in 2014, the reference year is 2012.

There are exemptions for companies located in development areas, and, at the discretion of the local council, those leisure based businesses who operate on a seasonal basis (activités saisonnières) are granted a pro-rata reduction in the rateable value base from which the tax is calculated.

A new business gets 100% relief in the first year and 50% in the second year.

Even though a new company will be granted exemption in its first year (and possibly 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.

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







Next: VAT

Back: Taxation of Business Profits







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