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Buying a European shelf company with VAT number

Whenever you need to start doing business immediately in a European country and you need a company with a VAT number, you don’t have to wait for the bureaucratic procedures.

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We encourage you to contact our partner law firms in Bucharest: Rolegal and E&C, both part of our legal network.

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BridgeWest is specialized in special corporate structures designed for tax minimization. No matter where you want to incorporate your company, you will need to consider how you can legally minimize costs.

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Paying Taxes in France

March 28, 2011, 2:06 pm
BridgeWest

 

1. What is the corporate tax in France?
Under French tax law the corporate tax is an annual direct tax that affects all profits made by corporations and business entities. Corporations domiciled or managed in France are obliged to have full corporation tax liability, having their domestic and foreign earnings taxable in France. The standard corporate tax in France is 33%. If the standard corporate income tax liability exceeds 763000 EUR, the tax rate is 34.43%, because of the social surcharge applied. If the annual turnover exceeds 250 million EUR, the tax rate is 35%.

 

2. What is the VAT in France?
The VAT, or Value Added Tax in France has a standard rate of 19,6% a since April 2000 and applies the majority of products and services, while the reduced rate of 5, 5% or 7% applies only to some sectors, as public health, culture, food products etc. A VAT of 2.1% is payable by some periodicals and medicines that are reimbursed by the social security system. Taxes in overseas departments (not including French Guiana) are different and start with 1.05 % and may reach 8.5%. Also the VAT in Corsica may be 0.9%, 2.1%, 5.5%, 7%, 8%, 13% or 19.6%.

 

3. How can the VAT be refunded in France?
Most entrepreneurs are able to recover their VAT taxes on their business expenses in France. The claims must be submitted quarterly or annually. In order to obtain the VAT refund, the entrepreneur must render him/herself as eligible by providing invoices and documents on the company represented.  The non-EU members must submit the refund application at the “Direction des résidents à l’étranger et des services généraux (DRESG)”. A form must be requested from the French tax office and filed by the refund claimer. Usually original copies of documents are requested in order to prevent fraud. Usually the VAT refund is obtained in a maximum time period of two months.

The entities from an EU country may ask for a refund through the French Tax portal. The representative must register with an electronic certificate and if it’s not the legal representative of the company, a formal power of attorney must be attached to the request. The application must be made for a period of minimum three consecutive months and for maximum one year. The copies of the invoices must be provided if the value of the claim is above 1000 EUR and 250 EUR for fuel expenses.

Six months are usually necessary to take the refund decision and if it’s granted, the amount is transferred in maximum 10 days in the claimant’s accounts.

 

4. What is the dividend tax in France?
In France, the dividends paid by French entities to non-resident shareholders are taxed with 30%, unless are minimized or exempt by double tax treaties provisions or EU parent/subsidiary regulations.

 

5. What are the taxes rates applied on other payments?

The interests paid to a non-resident are not taxed at all, while the royalties and the technical services fees are taxed with 33.33%, unless are abolished or minimized by the regulations of the anti-avoidance treaties or EU interests and royalties directive.

There is a branch remittance tax of 25% if it’s not canceled by a tax treaty or if the foreign head office is not located in an EU country.

 

6. Are there any incentives for foreign investors in France?
The French government favors foreign investment and in many instances facilitates entrepreneurs by providing various incentives such as grants, preferential loans or special tax treatment. However there are certain rules imposed by the government for residents and non-residents. A foreign investor looking for incentives by direct investment is advised to obtain a work permit before assuming the function. In order to encourage foreign investment, various forms of incentives are available for foreign individuals and entities wishing to start a business in France.

 

7. Why do I need a local accountant for my French business?
In order to carry out all the legal and administrative financial activities of a business an accountant is recommended for any business. However for a better understanding a French accountant controlling the business is the best way to go. Local accountants have a longer relationship with state authorities and offer the best solutions in certain situations.

 




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