Corporate income tax in France mainly concerns the profits of certain companies and legal persons domiciled in France.
Determination of profits taxable at corporate income tax rates in France
In application of the provisions of I of article 209 of the French Tax Code (“Code Général des Impôts”) relating to the rules of territoriality, the place of business operations determines in principle – subject to derogations resulting in particular from the application of international tax treaties – the taxation of profits liable to corporate income tax.
The legal entities subject to corporate income tax (“Impôt sur les Sociétés”) are mainly capital companies (“société de capitaux”), such as limited liability companies by shares (SA – société anonyme, SAS – société par actions simplifiée), limited liability companies (SARL – société à responsabilité limitée), limited partnerships by shares (SCA – société en commandite par actions); liberal companies (SEL – société d’exercice libéral, SELARL – société d’exercice libéral à responsabilité limitée, etc.);
Certain legal entities are however subject to corporate income tax even though they do not belong to the category of capital companies. It is the case of civil companies (“sociétés civiles”) which have an industrial or commercial activity and associations carrying out transactions to generate profit.
Corporate income tax will be due if the entity has opted for imposition at corporate income tax rates. Indeed, even if profits in certain companies are normally taxed on income tax in the name of each partner (case of general partnerships – “SNC” – société en nom collectif – for example), you can opt for a taxation of your company on the basis of corporate income tax.
Corporate Income Tax Rates in France
Corporate income tax in France is determined in compliance with article 219-I of the French Tax Code (unless other derogatory provisions apply).
Corporate income tax in France used to be levied at a rate of 33,1/3 % of benefits, however in an effort to stimulate the competitiveness of French companies France decided to progressively decrease corporate income tax as follows:
Companies with turnover less than 7,63 M€
| Benefits | Fiscal year starting from 1/1/2018 | Fiscal year starting from 1/1/2019 | Fiscal year starting from 1/1/2020 | Fiscal year starting from 1/1/2021 | Fiscal year starting from 1/1/2022 |
|---|---|---|---|---|---|
| From 0 € to 38 120 € | 15 % | 15 % | 15 % | 15 % | 15 % |
| From 38 120 € to 500 000€ | 28 % | 28 % | 28 % | 26,5 % | 25 % |
| In excess of 500 000 € | 33, 1/3 % | 31 % | 28 % | 26,5 % | 25 % |
Companies with turnover in excess of 7,63 M€
| Benefits | Fiscal year starting from 1/1/2018 | Fiscal year starting from 1/1/2019 | Fiscal year starting from 1/1/2020 | Fiscal year starting from 1/1/12021 | Fiscal year starting from 1/1/2022 |
|---|---|---|---|---|---|
| From 0 € to 500 000 € | 28 % | 28 % | 28 % | 26,5 % | 25 % |
| In excess of 500 000 € | 33,1/3 % | 31 % | 28 % | 26,5 % | 25 % |
Companies may be liable for other contributions:
- the social contribution which represents 3.3% of the tax due for companies with a turnover of at least € 7.63 million and whose corporate income tax exceeds € 763 000;
- the exceptional contribution of 15% of the corporate income tax (for companies whose turnover exceeds € 1bn) and the additional contribution of 15% of the corporate income tax (for companies whose turnover exceeds € 3bn) which apply for fiscal years ending from December 31, 2017 to December 30, 2018.
