10. Other French Business Taxes
10.5. Payroll Taxes in France
There are a number of other employee taxes payable by companies.
i. 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%.
ii. 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%.
iii. 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 0.68% 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.
Tax has been merged with the tax participation à la formation professionnelle to become a contribution unique à la formation professionnelle et à l'alternance from 2019.
iv. 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 circa 15K
However, a rebate is then applied to the amount owed, in order to reduce the burden of the tax.
v. 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.
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