A corporate tax rate in France in line with European standards
French corporate tax is based on principles aligned with European standards. Its rate is applied to a base that is favorable to investment and according to a principle of territoriality.
Verified on May 11th 2026
In a nutshell
- French corporate tax complies with European standards and is based on the company’s taxable profit.
- The standard rate is 25%. It is reduced to 15% for SMEs and to 10% for certain intellectual property income, under certain conditions. For 2026, a one-year exceptional tax on the profits of large firms (revenues exceeding €1.5 billion) has been introduced with the aim of increasing their contribution to reducing the budget deficit.
- A business, regardless of its country of origin, is taxable in France as soon as it carries out a profit-generating activity there.
- Taxable profit corresponds to revenues minus deductible expenses, including depreciation and provisions.
- Only profits from French sources, as well as those whose taxation is attributed to France by an international treaty, are subject to corporate tax.
- Specific regimes apply to groups of businesses to limit double taxation, both in France and internationally.
What is corporate tax in France?
Corporate tax is a direct tax on the profits earned by certain businesses.
It is calculated based on taxable income, obtained by applying the tax rules for re-adding and deducting taxable income to accounting profit.
This calculation method complies with European standards, which are based on the actual ability of businesses to pay tax.
What are the applicable tax regimes in France?
In France, the tax regime depends primarily on the legal structure, size and nature of the business activity.
Main existing tax regimes
- Corporate tax
Taxation of profits at the business level. It applies to most businesses. - Income tax
Profits are taxed at the shareholder level. - Standard actual regime
Mandatory for businesses with high revenues. It requires full accounting records. - Simplified actual regime
Designed for SMEs, it reduces accounting requirements. - Micro-enterprise regime
For very small businesses, it applies a flat-rate allowance to revenues without deducting actual expenses. - Controlled declaration
Applicable to self-employed independent contractors. - Agricultural regime
Flat-rate or actual, depending on revenues.
What is the corporate tax rate in France?
The standard corporate tax rate is 25%.
Between 2016 and 2022, the rate decreased from 33.3% to 25%. This is close to the average rate in OECD countries.
How are profits taxed in France?
The standard rate
- 25% on taxable profits.
- A 3.3% social contribution on corporate tax for businesses with revenues exceeding €7.63 million, after a deduction of €763,000.
The reduced rate
- 15% on profits up to €42,500 for SMEs (revenues < €10 million, paid-up capital, and 75% held by individuals).
- 10% on certain intellectual property income (patents, software), subject to the condition that R&D is carried out in France (the “IP Box” scheme).
Can a business subject to corporate tax opt to pay income tax?
Some businesses subject to corporate tax (SARL, SA, SAS) can opt for income tax.
Limited companies (SARL, SA, SAS), subject to corporate tax from their inception, may choose to be taxed under the income tax system at the start of their operations or during their existence, subject to the following conditions:
- Operational activity (excluding asset management).
- Fewer than 50 employees.
- Revenues or balance sheet total < €10 million.
- Not listed on a stock exchange.
- At least 50% of voting rights are held by private individuals.
- At least 34% of voting rights are held by the company’s director.
This option allows profits or losses to be directly deducted from personal income in proportion to their share of the capital held.
Single-member limited liability company (EURL)
The sole shareholder of a single-member limited liability company (EURL), a company automatically subject to income tax, is taxed on the entire profit in their personal tax return.
When is a business subject to taxation in France?
A business is taxable in France as soon as it carries out an activity there that generates profits, whether it is French or from overseas.
This applies in particular to:
- A subsidiary, a legally independent firm with its own legal personality registered in France.
- A branch, an entity without legal personality separate from the foreign business on which it depends.
- A permanent establishment.
A permanent establishment is a sufficient economic presence in a country to justify taxation there. The legal form chosen is irrelevant. The habitual conduct of business in France can be characterized by the following non-cumulative factors:
- Operating a business establishment in France.
- Carrying out transactions in France through a dependent agent.
- Carrying out transactions that constitute a complete business cycle.
- Fixed place of business in France.
- Dependent agent with the power to bind the firm.
International tax treaties specify these criteria and take precedence over domestic law. In case of uncertainty, an advance tax ruling can be requested from the tax authorities.
How is the taxable profit for corporate tax determined?
Taxable income = revenues – deductible expenses
Non-deductible expenses are re-added and certain tax deductions are subtracted to arrive at the taxable base
Total income from business activity:
- Sales
- Services rendered
- Other operating income
- Depreciation
- Provisions
- Rent
- Salaries and social security contributions
- Taxes and certain duties
- Purchases of goods and energy expenses
- Financial expenses
- Marketing and advertising expenses
Luxury expenses, which are generally considered excessive or unnecessary for the business’s operations, are not deductible.
Depreciation allows you to spread the cost of a fixed asset over its useful life. It serves three purposes:
- Accounting: To record the depreciation of the asset each year.
- Tax: To reduce taxable income.
- Economic: To prepare for the replacement of equipment.
Conditions for deductibility
Depreciation is tax-deductible when three cumulative conditions are met:
- The asset is a fixed asset subject to depreciation due to use, time or obsolescence.
- The depreciation has been actual and recorded in the accounts.
- The useful life is consistent with its actual or regulatory use.
In international groups, practices must comply with transfer price rules.
Land and works of art are not depreciable.
Typical depreciation periods
- Buildings: 20 to 50 years.
- Technical installations: 5 to 10 years.
- Transportation equipment: 4 to 5 years.
- Office equipment or furniture: 5 to 10 years.
- Microcomputers: 3 years.
A provision is an amount set aside to anticipate a future loss or expense that has not yet been incurred at the end of the fiscal year but is likely to occur.
Under certain conditions, provisions can be deducted from taxable income, thereby reducing the tax base.
Losses incurred during a given year can be carried forward indefinitely to future profits and, to a lesser extent, carried back to the profits of the previous year.
How does the taxation of groups of companies work?
A group can be taxed as a single entity, with the parent company becoming the sole taxpayer for corporate tax. The advantages are as follows:
- Profit/loss offsetting.
- Neutralization of internal transactions.
- Pooling of tax credits.
This regime allows for a reduction in overall tax liability and improved cash flow, subject to strict rules and reporting requirements. The option for tax consolidation can be exercised for a period of five fiscal years, which can then be renewed.
- The parent company must own at least 95% of each subsidiary.
- All subsidiaries must be subject to French corporate tax.
- Accounting periods must be aligned.
- The parent company cannot be 95% or more owned by another firm subject to corporate tax (except in certain cases).
Specific rules apply if the parent company is foreign or if the group includes French subsidiaries of foreign businesses. This situation requires particular analysis, especially with regard to the scope of possible consolidation and international agreements.
The parent-subsidiary regime is a tax option that reduces double taxation of dividends between a parent company and its subsidiaries, facilitating the repatriation of profits.
Dividends received by the parent company are exempt, excluding a 5% allowance for expenses and charges.
Capital gains on the sale of equity interests are also exempt, subject to a minimum holding period of two years (12% allowance).
How to declare and pay corporate tax?
This is an annual declaration, filed electronically via an online form.
It must be accompanied by the submission of the required documents (tax return, financial statements, etc.).
It covers the last completed fiscal year, therefore the results of year N-1 for fiscal years ending on December 31.
Payment is made online, via the official tax portal, in five installments:
- Four quarterly installments.
- One final payment due no later than the 15th of the fourth month following the end of the fiscal year.
- Final payment = annual profit tax – installments and tax credits.
In the event of overpayment, the excess is credited or refunded.
International taxation and international groups
Intragroup transactions must be carried out in strict compliance with international and local transfer price rules.
Suggestion de composant : accordéon
A group of businesses is defined by the existence of a relationship of dependence between their entities, whether:
- Legal, through majority ownership of capital or voting rights.
- Or de facto, due to the ability to impose economic conditions.
France has concluded more than 120 international tax treaties to avoid double taxation (crediting or exemption methods).
Transfer prices refers to the conditions applied to transactions between businesses within the same group located in different countries.
These transactions may involve:
- The sale of goods.
- The provision of services.
- The provision of personnel or assets.
- The payment of royalties for the use of trademarks or patents.
Intragroup transactions must comply with the arm’s length principle, in accordance with OECD rules.
Certain financial and intra-group transactions may be subject to withholding tax depending on various criteria (nature of payment, location, tax treaties).
- Dividends: Exemption in the European Union under certain conditions, limited withholding tax (0 to 25%) depending on the treaties, increased to 75% for non-cooperative states and territories (NCSTs).
- Interest: No withholding tax in principle, unless payment is made to an NCST.
- Royalties: Limited withholding tax depending on the treaties (0 to 25%).
- Intra-group services: No withholding tax.
More information
Ministry for the Economy website External link
Corporate tax calculation simulator External link
Declaration and payment of corporate tax External link
At a glance
This page explains the principles of corporate income tax in France, how it is calculated and the applicable taxation rules. It is based on institutional sources such as the Ministry for the Economy, the French tax administration and international tax treaties. It presents information covering business taxation, including taxable profit, tax rates and territoriality rules. It uses the example of companies subject to corporate income tax (CIT) in France and explains the concept of a permanent establishment.