Business Rates Relief in France
Friday 06 January 2017
All businesses in France are liable for business rates, although there are several temporary and permanent exemptions and reductions, including some for landlords.
The system of small business rates in France is called the cotisation foncière des entreprises (CFE).
However, only those companies with a turnover greater than €500K pay the CVAE.
The rates are determined from the value of the real estate you use to run the business.
Even though you may work from home you are still liable for the tax, although normally only at the minimal rate, between €215 and €1,019 per year, figures that are revised each year in line with inflation.
There are several business activities that are exempt from the tax, some permanent and some temporary. Not all professions and activities are included here, as there are a small number that will have very little relevance for expatriate business owners.
i. New Business - All new businesses are exempt from the rates for the first year of activity, irrespective of the commencement date of the business. The three-year exemption that used to apply to micro-entrepreneurs was ended in 2014.
ii. Artisans - Those who run a trade business are exempt from CFE on a permanent basis. In order to quality you must be an artisan registered with the Chambre de Metiers, who works alone or as part of a family business, and where manual labour is predominant. The employment of apprentices is permitted. There are a wide variety of trade based activities included with this exemption, although butchers and bakers are not granted the exemption.
iii. Taxi Drivers - Including ambulance drivers they are exempt on a permanent basis.
iv. Agricultural Activities - All such activities are exempt on a permanent basis.
v. Artists - Included in this group are artistic photographers, authors, certain translators, and composers.
vi. Press - Certain press activities are exempt on a permanent basis, including certain on-line only activities.
vii. Landlords - Owners who let part of their main home to a tenant for whom the accommodation is their permanent home, provided the rent is within reasonable limits and that it is not entirely self-contained accommodation within the property.
Chambre d’hôte and gîte (meublé de tourisme) owners are also exempt, subject to no decision to the contrary by the local council. That is to say, statute grants the general exemption, but councils have the power to remove it for their own area.
Where the rental accommodation is not part of your home, whether primary or secondary residence, no automatic exemption exists. Any exemption that may be accorded must, in such circumstances, be at the express decision of the local council for all similar properties in the commune.
Within urban and rural development areas of France, a small number of permanent or temporary exemptions are granted from business rates.
Perhaps of greatest interest for expatriate business owners are those granted with rural development zones - Zone de Revitalisation Rurale (ZRR) - which are available subject to the decision of the local council.
Those notably exempt are artisans and those in one of the professions libérales. Industrial based business operations and some commercial activities are also eligible, although both subject to stricter conditions on investment and employment.
The duration of the exemption from CFE is for a maximum of 5 years.
Within ZRRs owners of chambre d’hôtes and classifed gîtes (meublé de tourisme) can also obtain exemption from the taxe d'habitation and the taxe foncière, both of which are domestic rates that are payable.
The exemption is only for that part of the accommodation that is used exclusively for letting purposes, provided the property is either part of your principle residence or second home.
The gîte accommodation must also be a meublé de tourisme classé. See our article Taxation of Gites.
You can find the list of those communes currently classified at <a href="http://www.observatoire-des-territoires.gouv.fr/observatoire-des-territoires/fr/classement-en-zrr-2017-excel?rech=1"><span style="FONT-WEIGHT: bold">Zones de Revitalisation Rurale span>a>.
You need to make specific application each year using the form Cerfa n°13567*01 for the taxe d'habitation and Cerfa n°15532*01 for the taxe foncière.