Most businesses in France are liable for local business rates, which must be paid this month.
The system of small business rates in France is called the Cotisation Foncière des Entreprises (CFE).
The CFE is in fact made of up two components - the Contribution Economique Territoriale (CET) and the Cotisation sur la Valeur Ajoutée des Entreprises (CVAE). However, only those companies with a turnover in excess of €500K pay the CVAE.
The rates are determined from the value of the real estate you use to run the business, or the rent you pay if you are a tenant.
Even though you may work from home you are still liable for the tax on the basis of the workspace you occupy.
There are a number of exemptions from the tax, some permanent and some temporary:
- The tax is not payable in the first year of the business, and payable at the rate of 50% in the second year.
- If your turnover is less than €5,000 you do not pay the tax.
- Artisans who work alone or within a family business have a permanent exemption (although not butchers or bakers), as do agricultural activities and artists/authors, and certain business activities in development areas.
- Owners of a chambre d'hôte or classified gîte accommodation are also exempt (unless the local council decides otherwise), provided the property is either their principle residence or second home.
- The letting of unfurnished accommodation is also exempt (up to €100K) as are lodgings.
The level of the rates payable is determined locally, but within parameters set by central government, revised upwards each year in line with inflation.
Most smaller councils set the minimum rate towards the lower end of each range if the rateable value of the space used is small. This is particularly the case if you work from home, when only the minimal local rate is likely to apply.
There are six rate bands, depending on the turnover of the business, as follows:
|Small Business Rates 2019|
|> €5,000 < €10,000||€221 - €526|
|> €10,000 < €32,600||€221 - €1,050|
|> €32,600 < €100,000||€221 - €2,207|
|> €100,000 < €250,000||€221 - €3,679|
|> €250,000 < €500,000||€221 - €5,254|
|> €500,000||€221 - €6,833|
The reference year used for determining the turnover figure is two years prior to the year of imposition, so for 2019 it will be based on your turnover for 2017. If you started the business in 2018, and your turnover was less than €5,000 you would need to apply to obtain exemption.
It is collected via the national tax authority, who have sent out tax notices to all businesses. They also collect a small management charge on behalf of the councils and themselves, which is added to the rates payable.
This year the tax is payable by 16th December, and can also be paid monthly by prior registration, although it is too late to do so for this year if you have not already opted for monthly payment.
To pay on-line this year, if you have not done so, you need to create an account on the website of impots.gouv.fr, in the section 'Votre espace professional''.