Guide to Starting a Business in France

10. Other Business Taxes in France

  1. Business Rates
  2. VAT
  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, a peculiar exception française.

The 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.


We do not consider the CVAE here as only those businesses with a turnover of greater than €500K are liable. In any event, in March 2022 President Marcron stated it was his intention to abolish it, after halving it in 2021. In September 2022, the government announced that the tax would be abolished over two years, with complete abolition in 2024.

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 2022 the bands are as follows, subject to the local council having made an appropriate resolution to do so by September of the previous year. The rates are increased in line with inflation each year.

Turnover Minimum Rates
<€5,000 €0
Between €5,000 - €10,000 €227-€542
Between €10,000 - €32,600 €227-€1,083
Between €32,600 - €100,000 €227-€2,276
Between €100,000 - €250,000 €227-€3,794
Between €250,000 - €500,000 €227-€5,419
Above €500,000 €227-€7,046

The reference year used for determining the turnover figure is two years prior to the year of imposition. So for rates payable in 2022, the reference year is 2020.

New companies are not taxed in their first year and pay at the rate of 50% in their second year.

Similarly, there is no liability if turnover is lower than €5K.

There are a number of exemptions from the tax, some permanent and some temporary, perhaps the most important of which is that artisans who work alone or in a family business are exempt, although butchers and bakers are not exempt. Artisans who also employ salaried staff obtain a percentage reduction. Butchers and bakers do not obtain this exemption.

Others exempt include agricultural activities and artists/authors, and accredited press agencies.

Owners of chambres d'hotes and accredited gite accommodation are also exempt, provided the property is at least part of their residence and that it is only holiday lettings.

There are exemptions for companies located in development areas, and, at the discretion of the local council, those 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.

The 2020 Loi de Finances widened the level of relief to commercial businesses in rural communes and artisanal and commercial businesses located in zones de revitalisation des centres-villes. The relief is subject to the decision of the local councils.

Similarly, for those sectors most affected by Covid-19, local councils have been authorised to grant two-thirds relief from the tax, although not all have chosen to do so.

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 monthly.

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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