9. Taxation of Business Profits in France

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

9.4. Company Taxation

Company tax in France is called Impôts sur les societés (IS) payable on net profits.

Under the system of company taxation a distinction is made between income of the company and income of the owner.

Income received by the owner is treated as a salary and is taxed through the personal income tax system, deductible for the purposes of calculating liability to company tax.

The rate of company tax depends on the turnover and capital structure of the business (2020).

  • If the capital was provided by the owners, and at least 75% continues to be held by individuals, then the rate of taxation is 15% for profits up to €38,120 per annum.

  • Beyond this profit figure the rate is 28%, up to net profits of €500K.

  • Profits in excess of €500K are taxed at the rate of 31%

These levels of taxation are progressively being reduced over the next few years, as has been the case since 2017. The basic 15% rate on the first slice of profit will, however, remain in place.

Tax is payable on a quarterly basis on 15 March, 15 June, 15 September et 15 December.

New companies and those who level of taxation in the previous year was less than €3,000 are exempt from quarterly payments.

The company tax return should be made within three months of close of accounts or 30th April each year.

Whilst you may not wish to elect to create a limited company when you first establish your business (and thereby pay company tax), you can later migrate to this status.

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