Guide to French Corporate Income Tax (CIT)

Setting up and running a business in France involves navigating various tax obligations, including the French corporate income tax (Impôt sur les Sociétés or IS).

Whether you’ve established a French company or operate a foreign business with activities in France (permanent establishment (PE)), understanding how French corporate income tax applies to your situation is crucial for legal compliance and optimizing tax benefits. This guide, designed by our tax lawyers, will help you navigate the complexities of the French corporate tax system.

Legal advice for French corporate income tax
French corporate income tax
Who must pay the French corporate income tax?
What amounts are taxed with the French corporate income tax?
French corporate tax rates
Glossary: useful terms to understand the French corporate income tax

Legal advice for French corporate income tax

France based Valoris Avocats specializes in corporate tax matters, providing tailored advice for companies of all sizes. Our team’s expertise covers both French and international tax regulations, ensuring that our clients receive comprehensive support.

We work with businesses operating in multiple jurisdictions, providing services in several languages, including English and German. If you need assistance with tax compliance, structuring your business for tax efficiency, or filing your corporate tax returns, our team of specialists are there to assist you. Contact us today for personalized advice.

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French corporate income tax

The French corporate income tax (impôt sur les sociétés (IS)) is a tax levied on the profits of companies operating in France.

Since 2018, the French tax system has undergone significant reforms aimed at reducing the tax burden on businesses, aligning French corporate tax rates with European standards.

The main focus of these reforms was to progressively lower the corporate tax rate, enhancing France’s competitiveness as a business-friendly country.

Additionally, companies engaging in cross-border activities must consider the impact of double taxation agreements between France and other countries, which can mitigate potential tax liabilities on international profits.

Who must pay the French corporate income tax?

Corporate income tax in France applies to both domestic and foreign companies, though the specific obligations differ.

French companies

Companies incorporated in France are in principle subject to corporate income tax on their global profits. However, in principle, French corporate tax only applies to profits made within the French territory. This applies to a wide range of business entities, from small firms to large multinational corporations.

Foreign Companies

Foreign companies conducting business activities in France—whether through a branch, subsidiary, or permanent establishment (PE) —are also liable to pay corporate tax on profits generated within France. This is important for businesses operating across borders, as they must understand their tax obligations in each jurisdiction.

Certain entities, such as non-profit organizations and small businesses meeting specific criteria, may be exempt from French corporate income tax or qualify for reduced rates. Consulting with tax professionals can help clarify these exceptions and ensure compliance.

What amounts are taxed with the French corporate income tax?

The taxable base for corporate income tax in France is the taxable net profit of a company, which includes revenues from business activities minus deductions and expenses allowed by French tax law. Here’s a breakdown of what constitutes taxable amounts:

• Turnover: This refers to the total revenue generated from the company’s operations, including sales, services, and other income streams.
• Deductible Expenses: Companies can deduct a wide range of expenses from their taxable income, provided that the expenses are in the company’s interests, including:
  • Employee salaries and benefits
  • Business operating costs (rent, utilities, etc.)
  • Depreciation of assets
  • Interest on loans (subject to limitations, such as the legal rate paid to shareholders or under-thin capitalization rules)
  • Research and development expenses (often subject to additional incentives, as tax credits)

Taxable income is calculated after subtracting these eligible expenses, allowing businesses to reduce their tax burden. Both French and foreign companies must comply with these rules, ensuring accurate reporting of their profits and expenses.

French corporate tax rates

The French corporate income tax rate has been gradually reduced over the past few years. As of 2025, the standard corporate tax rate is 25%, though certain businesses may benefit from lower rates depending on their size and revenue.

Small and Medium-Sized Enterprises (SMEs) with Turnover Below €10 million

For SMEs, a reduced corporate tax rate of 15% applies to the first €42,500 of profit.

Big Companies with Turnover Exceeding €1 billion

These large corporations may be subject to an exceptional contribution leading to an effective rate of 15%, 30% or 35,3% depending on their turnover.

This progressive system ensures that smaller businesses benefit from more favorable corporate income tax rates, while larger corporations contribute a proportionately higher share of their profits.

Filing the French corporate income tax return

Corporate tax returns must be filed annually by accountants or chartered accountants, with deadlines varying depending on the company’s fiscal year. Typically, companies with a year-end calendar must submit their corporate income tax returns by May of the following year. The filing process requires companies to provide detailed information about their profits, expenses, and any deductions or credits claimed.

Here are the usual steps to file the French corporate income tax return:

1. Gather financial statements and supporting documents for the relevant fiscal year.
2. Complete the tax return form, which is available through the French tax authorities’ online portal.
3. Submit the return by the specified deadline, ensuring all information is accurate and complete.

Late filings or inaccurate submissions can result in penalties and interest for late payment, so it is of high importance to be thorough and timely in completing your return.

Glossary: useful terms to understand the French corporate income tax

• Impôt sur les Sociétés (IS): French corporate income tax, applicable to profits generated by companies or permanent establishment in France.
• Bénéfice imposable: Taxable profit, which is the net income after deductions and expenses.
• Taux réduit: Reduced tax rate, available to small and medium-sized enterprises (SMEs) meeting specific turnover or profit criteria.
• Déduction fiscale: Tax deduction, which reduces the taxable income by accounting for eligible business expenses.
• Intégration fiscale: A tax consolidation regime allowing a parent company, known as the ‘head of the group’, to be solely liable for corporation tax for the entire group that it forms with its subsidiaries.