9. Taxation of Business Profits in France

9.1. Main Business Taxation Options in France

Broadly speaking, the basis on which you will be taxed will depend on the legal/business tax structure you adopt for running the business.

Depending on these two criteria a business may be taxed either under the personal income tax system, called Impôts sur le Revenu, or the system of company taxation, called Impôts sur les Societiés.

If you are a sole trader (Entreprise Individuelle) you are automatically taxed under the personal income tax system. You have the choice of being taxed either as a micro-entrepreneur, or through the rules of regime réel.

If you set up as a limited company in sole proprietorship (Entreprise Unipersonnelle à Responsabilité Lmitée - EURL) you may elect to be taxed under the personal income tax system through the rules of regime réel, or through the system of company taxation.

A private limited company in joint ownership (Société à Responsabilité Limitée - SARL) can only be taxed under company tax, unless it is a special type of family business, or a small company under 5 years old, when it can elect to be taxed under the personal income tax system.

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