Guide to Starting a Business in France

9. Taxation of Business Profits in France

  1. Main Options
  2. Micro-Entreprise
  3. Regime Réel
  4. Company Tax
  5. Dividends

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 have the choice of being taxed under the personal income tax system through the rules of regime réel or through company taxation.

A private limited company in joint ownership (Société à Responsabilité Limitée - SARL) can only be taxed under company tax (Impôts sur les Societiés), 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.

There are othey types of legal structure which can be used, notably a Société par actions simplifiée (SAS) often used for those seeking investors for their business project.

Partial relief from income tax is available to individuals who relocate to France to take up employment in a company based in France.

You may also be eligible for a scheme of tax relief for expatriate executives which you can read about in France Insider at Tax Relief for Expatriate Executives.

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