Corporate Income Tax in France

The corporate tax in France is an annual tax in principle that affects all profits made in France by corporations and other entities. It concern about one-third of French companies. Corporation tax belongs to the direct taxes. Corporations domiciled or managed in France are deemed to have full corporation tax liability. This means that their domestic and foreign earnings are all taxable in France. The taxable income is equal to the difference between gross profit and costs and deductible expenses. The gross operating profit is made by the difference between sales and costs. In addition to the gross operating profit, all income or profits made apart are normally taxable: income from the rental of property, income from interests, income from deposits and bonds.

Taxable period and tax base
In France is taxable period the calendar year, the tax year ends also on December 31. The basis of taxation is the income earned by the corporation during the calendar year. Provisions of corporation tax law must be taken into account. Losses may be carried forward with no time limit. On certain conditions, losses may be carried back three years.

Tax due date
The corporate income tax has to be liquidated by latest one month after the book keeping for the fiscal year has been given. For a firm ending its accounting period the 31 of December, the tax is due the 15 of April. There are four preliminary payments during the fiscal year, due the 15 of March, 15 of June, 15 of September, 15 of December.

Tax rate
• The standard tax rate in France is 33.33 %. In France is the reduced rate, it is 8 % and applies to long-term capital gains, except fro certain capital gains of a financial nature. The reduced rate 15 % applies to the fraction of profits ploughed back into the business by companies with a turnover of less than 7 630 000 EUR and not belonging to another company and with fully paid-up capital at least 75 % held by natural persons. The reduced rate is only to the profit in 38 120 EUR.
• The corporations in France must pay also the social contribution. The amount of the social contribution on income is assessed according to the amount of corporate income tax paid. The rate is 3.3 %. Small business (with turnover of less than 7 630 000 EUR) are exempt.
• The corporations in France must pay also the solidarity contribution. The corporate social solidarity contribution is levied according to the turnover of the business corporation. The corporate social solidarity contribution has to be paid by 15 of May. The rate is 0.13 % of the net turnover. Small businesses are exempt.

Tax exempt
The bodies exempted from payment, subject o certain conditions, include regions, departments, municipalities, farmers associations and cooperatives, housing associations, investment companies and societies, whose aim is to make goods available to their members.