All French businesses must pay tax. This is mainly tax on profits, business tax and value added tax (VAT). There are also additional taxes such as tax on salaries, apprenticeship tax, company vehicles tax, office tax, etc.
Depending on the legal structure of the business, profits are subject to the following taxes:
- Income tax which applies to sole traders, Single Owner Limited Liability Companies (EURL), General Partnerships (SNC) and Professional Civil Partnerships (SCP).
- Corporation tax which applies to Limited Liability Companies (SARL), Public Limited Companies (SA) and Simplified Joint Stock Companies (SAS). By being liable for corporation tax, business owners are personally taxed on their revenue and on any dividends they receive.
- Annual fixed tax (IFA) which is currently being phased out. From 1 January 2009 only businesses with a gross turnover of 1.5 million euro or more will have to pay this tax. This threshold will increase to 15 million euro from 2010 and will be phased out completely in 2011.
Business tax is a local tax which varies between communes (local districts). It takes into account the rental value of the assets, and for certain business sectors it takes into account some of the business income.
Value added tax (VAT) is an indirect tax on goods and services consumed or used in France. Each business invoices its clients for VAT at the normal (19.6%) or reduced (5.5%) rate which is then paid to the Public Treasury.
All tax procedures can be carried out online.
You can file your VAT declaration on paper or electronically.
Submitting your tax declaration
Tax payments can be made online.
If tax is not paid on time, business owners receive a tax notice which can be contested. This marks the beginning of a litigation procedure after which business owners will be able to bring their case before the courts.
The Impots.gouv.fr portal provides information on tax matters, notably tax obligations applicable to foreign businesses set up in France.