Setup your Business in France
The French system of taxation can be characterised by its complexity, high marginal rates and high administrative costs. There are so many different basis of assessment, and such a large number of taxes that it defies easy description. While there are a set of principles that govern the operation of the system, there are so many exceptions to the general rules that it is sometimes difficult to appreciate that any exists at all!
However, it would be a mistake to assume that France is a high taxation country for everyone. Those who relocate to France to retire are likely to be pleasantly surprised at just how little in taxes they will pay.
Foreign Companies in France:
Foreign companies pay taxes in France when they have permanent establishments in France.
Favourable regimes are applied to expatriates.
General taxes in France:
Corporate tax – impot sur les societes (IS)
Value Added Tax
Capital Gains Tax
Social and residence tax
We provide following services in France through our affiliates, which are fully compliant with French tax authorities – Ministry for the Economy and Finance:
Business start-up advice
Bookkeeping and bank reconciliations
Fully outsourced accounts department
Payroll support or fully outsourced payroll managed by us
VAT refund and payments
Double taxations reliefs
Taxation advice for individuals
Specialist corporation tax services
Property and land transactions planning
Business development and consultancy
Compliance services with local tax authorities
Tax rates at a glance(As of January 1 2015)
Corporate tax rate- 33⅓% (a)
Capital gains- 0/15/33⅓% (a)
Branch tax- 19.00%
Dividends- 30/55 (b)(c)(d)
Interest- 0/50 (b)(e)(f)
Royalties- 33⅓/50 (b)(e)(f)
Net operating losses (years)
Carry back- 1 (g)
Carry forward unrestricted- (h)
For resident companies, surtaxes are imposed on the corporate income tax and capital gains tax.
These are the withholding tax rates under French domestic law. Tax treaties may reduce or eliminate the withholding taxes.
Under the EU Parent-Subsidiary Directive, dividends distributed by a French subsidiary to an EU parent company are exempt from withholding tax, if, among other conditions, the recipient holds or commits to hold at least 10% of the subsidiary’s shares for at least two years.
The withholding tax rate is 55% for distributed profits paid into uncooperative states.
No withholding tax is imposed on interest and royalties paid between associated companies of different EU member states if certain conditions are met.
The withholding tax rate is 50% for interest on qualifying borrowings and royalties paid into uncooperative states.
Losses carried back may not be more than €1 million ($1.1 million).
The amount of losses used in a given year may not be more than €1 million plus 50% of the taxable profit more than this limit for such year.