Paying Taxes in France

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%. A reduced 8% tax rate applies to long term capital gains, and 15% rate applies to the fraction of profits of companies owned in 75% by natural persons, with a profit of 38.120 EUR.

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% applies only to some sectors, as public health, culture, etc.

3. How can the VAT be refunded in France?
Most entrepreneurs are able to recover their VAT taxes on their business expenses in France. In order to obtain the VAT refund, the entrepreneur must render him/herself as eligible by providing invoices and documents on the company represented. 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.

4. What is the dividend tax in France?
In France taxpayers are able to choose the standard dividend tax rate of 18% applied to gross dividend with no deductions or abatements, or for the regular scale rates which apply for each business with relevant deductions or modifications.

5. 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.

6. 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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