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Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information

Corporate Taxes

Tax Base For Resident and Foreign Companies
Foreign companies are taxed on the profits they make in France.
 

Tax Rate

Normal corporate tax rate 33,1/3%
Companies with a turnover of more than 7 630 000 EUR , companies where the share of individuals in the capital does not go over 75% 33.1/3% + a social contribution of 3.3% of the corporate tax payed
Companies with a turnover of less than 7 630 000 EUR and those where the share of individuals in the capital goes over 75% Reduced rate of 15% on the first band of taxable income within the limits of a total amount of 38,120 EUR.
 
Tax Rate For Foreign Companies
Foreign companies are taxed on the profits they make in France. The rate is 33.83%.
Capital Gains Taxation
Long term capital gains made by companies subject to corporate tax (IS) are not taxed.
Main Allowable Deductions and Tax Credits
Expenses are deductible for depreciation or amortization, reserves, rents for premises and equipment, wages, etc.
Tax credit exists for apprenticeships especially.
Other Corporate Taxes
From January 1st 2010 the Professional Tax was replaced by a Territorial Economic contribution levied for the profit of territorial governments. The Contribution Economique Territoriale ( CET ) is a local tax imposed by the departmental and regional councils on businesses to assist in the funding of local services and the Chambres de Commerce/Metiers.
A Flat rate annual tax (IFA) is also levied on companies.
 

Country Comparison For Corporate Taxation

  France OECD United States Germany
Number of Payments of Taxes per Year 7.0 14.2 11.0 16.0
Time Taken For Administrative Formalities (Hours) 132.0 199.3 187.0 215.0
Total Share of Taxes (% of Profit) 65.8 43.0 46.8 48.2

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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Accounting Rules

 

Accounting System

Accounting Standards
Official accounting plan (PCG)
Accounting Regulation Bodies
Parliament
CNC , National Accounting Council
ANC , French Accounting norms Authority
Accounting Law
The main source of accounting regulations in France is the accountancy law (Act 83-353 of 30 April 1983 ) integrated in the Code of Commerce (articles 8 to 17, become articles L 123-12 to L123-28 in the new Code of Commerce) and completed by the decree 2002-312 of the 26th of February 2002 relative to the simplification of accounting obligations for small companies. The accountancy law has incorporated the recommendations of the 4th Community Directive at the national level.

The second major source of French accountancy law is the Act 85-11 of 3/01/1985 which incorporates into national law the provisions of the 7th Community Directive for groups of companies ( directive 83/349/EEC of the Council concerning consolidated accounts).
Difference Between National and International Standards (IAS/IFRS)
European companies listed on the stock exchange must establish their annual consolidated accounts on the basis of the IAS/IFRS standards.
Accounting News
France accounting news
 

Accounting Practices

Tax Year
From January 1 to December 31 .
Accounting Reports
Annual accounts: the balance sheet, the profit and loss account and the notes to the accounts.
The annual report
The statement of source and application of funds (compulsory for large companies)
Publication Requirements
There are three levels of reporting: The basic system (Normal), an abridged system (for small companies), a developed system. They depend on the legal form and size of the companies (defined in relation to the total of the balance sheet, the turnover and the number of employees).
The reporting is annual, except for listed companies for whom reporting is quarterly.
 

Accountancy Profession

Accountants
The comptable (accountant) is responsible for the legal obligations of the company in regards to accounting.
The expert-comptable (chartered accountant) certifies company accounts.
The commissaire aux comptes (auditor) certifies the accounts carried out by the chartered accountant (for companies with more than 50 employees, joint-stock companies and public limited companies).
Professional Accountancy Bodies
OEC , The Higher Council of the Order of Chartered Accountants
CNCC , The National Company of Auditors (in English)
IFAC , The International Federation of accountants
Member of the International Federation of Accountants (IFAC)
The CNCC and the OEC are members.
Member of Other Federation of Accountants
Federation of European chartered accountants
Audit Bodies
Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact an external auditor: KPMG , Ernest & Young , PricewaterhouseCoopers.

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Consumption Taxes

Nature of the Tax
Value Added Tax (VAT)
Standard Rate
19.6%
Reduced Tax Rate
- Reduced rate of 7% for food on-site consumption (restaurants), Non-reimbursable medications, Tickets for entertainment, Passenger transportation, Books, private televisions channels, water supply, Real estate transactions, Supplies of housing in hotels, Goods originating from farms, animal feed products
- Reduced rate of 5.5% for sales of certain foodstuffs, supplies of electricity, gas, or energy, and equipment or accommodations for the disabled.
- Reduced rate of 2.1% for certain products reimbursed by the Social Security.
To find out about the rates valid in regions outside metropolitan France, click here (in French).
Exclusion From Taxation
Financial and insurance services, stocks of medicines, education and training are exempt from VAT. Export outside the EU are also exempt of VAT.
Method of Calculation, Declaration and Settlement
The rate of VAT is applied to the sales price.
Settling VAT is done through declarations which vary according to the tax regime ( normal real regime or simplified real regime ).
Other Consumption Taxes
Domestic consumption tax on petroleum products (TIPP)
Domestic consumption tax on natural gas (TICGN)
Domestic consumption tax on coal and lignite
Domestic tax on tobacco (snuff and for smoking), cigars and cigarettes.
Domestic consumption tax on beer
A 2% tax is imposed on hotel services exceeding EUR 200 per night.

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Individual Taxes

Tax Base For Residents and Non-Residents
Residents are taxed on all their income (national and international) while non-residents are only taxed on income received in France.
 

Tax Rate

Personal income tax (IRPP) Updated in the Loi de Finance 2011. Progressive rate up to 41%
Up to EUR 5,963 0%
Between EUR 5,963 and 11,896 5.5%
Between EUR 11,896 and 26,420 14%
Between EUR 26,420 and 70,830 30%
Above EUR 70,830 41%
 
Allowable Deductions and Tax Credits
Child care, consumer credit, tax credit for young people under 26 who take a job in certain industrial sectors or geographical areas in difficulty, etc.
Special Expatriate Tax Regime
In France there is a special expatriate tax regime. It especially concerns health insurance and complementary retirement pension contributions and the possible exemptions.
Capital Tax Rate
Property tax: the rate depends on the location of the building (local tax).
Wealth tax (ISF): for an estate whose net value is over EUR  790,000 on 1 January 2009, between 0 and 1.8% .
Death and gift duties: 5% to 60% .

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
France has signed fiscal conventions with over 112 countries in the world.
Withholding Taxes
Dividends: 25%, Interest: 18%, Royalties: 33.33%

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Sources of Fiscal Information

Tax Authorities
Web portal of the French fiscal administration
The Ministry of the Economy and Finance
Other Domestic Resources
The fiduciary review
Information on French taxes
CIC Bank information on the French Tax system
Country Guides
Deloitte Tax Guide for France
Invest in France Guide (in English)
Consult Taxation trends in the European Union.

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Learn more about Service Providers in France on Globaltrade.net, the Directory for International Trade Service Providers.
 

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Learn more about Taxes and Accounting in France on Globaltrade.net, the Directory for International Trade Service Providers.
 

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Last Updates: July 2012

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