Corporate Tax in France: A Comprehensive Guide
Overview of France's Corporate Tax Regime
France has a territorial tax system, meaning that only income earned within France is subject to corporate income tax (CIT).
The standard CIT rate is 25%, but companies with profits exceeding €500,000 pay a higher rate of 26.5%.
CIT Rates and Changes
- Corporate tax rates in France have been gradually decreasing over the years.
- In 2021, the standard rate was 26.5%.
- In 2024, the standard rate is expected to be reduced to 25%.
Taxable Income and Exemptions
Taxable income for CIT purposes includes all profits realized by a company from its business activities.
Certain types of income are exempt from CIT, such as:
- Dividends received from other French companies
- Capital gains on the sale of assets
- Foreign-source income earned by a foreign branch
Tax Deductions and Allowances
Various deductions and allowances are available to reduce taxable income, including:
- Interest expenses
- Depreciation and amortization expenses
- Research and development expenses
- Charitable contributions
Tax Administration and Compliance
The French tax authorities are responsible for administering and collecting CIT.
Companies must file their CIT returns electronically by May 15th each year.
Conclusion
Corporate tax in France is a complex and constantly evolving area of law.
Companies should seek professional advice to ensure compliance with the latest regulations and maximize their tax efficiency.
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