10. Other French Business Taxes

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

10.3. Payroll Taxes in France

There are a number of other employee taxes payable by companies.

10.3.1. Training Tax Participation à la formation professionnelle

A tax to assist in the development of continuous professional training levied at a variable rate depending on the number of employees in the business.

For a business with less than 10 employees the rate is 0.5%.

10.3.2. Housing Tax Participation à l’effort de construction

A tax payable to assist the development of new and improved housing levied on a business with at least 20 employees at the rate of 0.45%.

10.3.3. Apprenticeship Tax Taxe d’apprentissage

A tax payable by a business whose activity is either commercial, trade or industrial, to assist in the development of apprentice training.

Tax is levied at the rate of 0.50% on the total salaries of the business.

A business can be obtain exemption from this tax if they already make suitable provision for apprenticeship in the business.

10.3.4. Salary Tax Taxe sur les salaires

Tax paid on the salaries of employees by those business’s who are exempt from TVA on their activities.

Even though a company may be subject to VAT, those companies below the TVA turnover threshold are exempt from the tax.

It is a tax that mainly concerns banks, finance companies, certain professions liberales, mutual organisations, so the tax is not particularly relevant for most people setting up a business in France.

The tax rate is on a progressive, sliced basis on the salary starting at 4.25% increasing to 13.60% on that part of the salary above €14,295 for 2007.

However, a rebate is then applied to the amount owed, in order to reduce the burden of the tax.

10.3.5. Company Car Tax Taxe sur les véhicules de société

Those vehicles owned and maintained by a company are subject to this tax.

A company car is a tax free perk, as the value of the car for private use is added to the remuneration of the beneficiary for the purposes of income tax and social security contributions.

In the event you are liable for the tax, the basis on which it is charged depends intially on the age of the vehicle.

In relation to those vehicles registered before June 04, and not owned by the company before Jan 06, it is based on the size of the engine.

For vehicles registered after June 04 the rate of taxation depends on the level of CO2 it emits.

As might be expected the tax favours newer, lower polluting cars over older vehicles.

The government has recently issued guidance on the detailed application of these new rules and we will update the site when the new regulations are clear to us.