Taxes in France: what your SAS pays
Taxes in France are organised into three main fronts for your company: profit (Impôt sur les Sociétés, IS), consumption (TVA, the equivalent of VAT) and local activity (CFE and CVAE). Social Security contributions are added if you hire employees or pay yourself a salary.
The good news is that France does not apply regional corporate taxes as in Spain: rates are national and uniform across the whole territory, which simplifies planning.
IS: the French corporate tax
The Impôt sur les Sociétés (IS) is the equivalent of Spanish corporate tax. The standard rate is 25% on profits, applicable since 2022 after a gradual reduction from 33.33%.
SMEs can benefit from a reduced rate of 15% on the first €42,500 of annual profit. To do so, they must have turnover below €10 million and at least 75% of their capital controlled by individuals.
If your profit exceeds that €42,500, only the excess is taxed at 25%: the reduced bracket is maintained on the initial base.
VAT in France (TVA): rates and registration
French VAT, known as TVA (Taxe sur la Valeur Ajoutée), has a standard rate of 20%. There are also reduced rates depending on the nature of the goods or services, which should be applied correctly to avoid invoicing errors.
Key points
- Standard rate: 20%
- Intermediate rate: 10% (hospitality, transport, home renovations)
- Reduced rate: 5.5% (basic food, books, energy)
- Special rate: 2.1% (press and reimbursable medicines)
CFE and CVAE: the local taxes
The CFE (Cotisation Foncière des Entreprises) is an annual local tax on the rateable value of the premises and facilities used by your company. It is payable even if you do not make a profit, because it depends on where you are established.
The CVAE (Cotisation sur la Valeur Ajoutée des Entreprises) taxes the value added generated by the company, with a maximum effective rate of 0.28%. It should not be confused with VAT: it is calculated on its own base and is being phased out, with full abolition planned for 2027.
Both taxes are settled through the local administration and form part of the monthly tax package we manage at Filnet.
Dividends and social contributions
If you pay yourself dividends from your SAS, they are taxed in France under the prélèvement forfaitaire unique (PFU), a flat rate of 30% comprising 12.8% personal income tax and 17.2% social contributions. You can opt to include them in the personal income tax scale if it works out better for you.
The president of a SASU treated as an employee contributes to the French Social Security, with contributions noticeably higher than in Spain. Choosing between salary and dividends is a key decision that should be planned with advice.
Double taxation treaty with Spain
Spain and France have a treaty to avoid double taxation. If your company pays corporate tax in France and you are a tax resident in Spain, you will not be taxed twice on the same profits or dividends: the treaty allocates the right to tax each type of income.
