What is IS(Corporate income tax)?
Wondering about corporate taxes in France? Corporate income tax is a tax concentrated on a company's profits. Specifically, which companies does it apply to? What is the tax rate? Let Micco explain to you all the specifics about corporate income tax.
Wondering about corporate taxes in France? Corporate income tax is a tax concentrated on a company's profits. Specifically, which companies does it apply to? What is the tax rate? Let Micco explain to you all the specifics about corporate income tax.
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Table of Contents
- What is Corporate Income Tax?
- Who Needs to Pay Corporate Income Tax?
- What is the Corporate Income Tax Rate for Your Company?
- How to Declare and Pay Corporate Income Tax?
1. What is Corporate Income Tax?
Corporate income tax, also known as "profit tax," is a tax levied on a company's annual profits.
2. Who Needs to Pay Corporate Income Tax?
Corporate income tax (IS) applies to businesses operating in France, meaning those conducting their regular commercial activities within the country. Note that profits made abroad are not subject to corporate income tax.
Companies Automatically Subject to Corporate Income Tax
The following types of companies are subject to corporate income tax:
- Société Anonyme (SA) - Public Limited Company
- Société en Commandite par Actions (SCA) - Partnership Limited by Shares
- Société à Responsabilité Limitée (SARL) - Limited Liability Company
- Société Coopérative - Cooperative
- Société par Actions Simplifiée (SAS) - Simplified Joint-Stock Company
- Société d'Exercice Libéral (SEL, SELARL) - Professional Services Corporation (under certain conditions)
- Syndicat Professionnel - Professional Union
- Société Civile d'Activité Industrielle ou Commerciale - Civil Company with Industrial or Commercial Activities
Some companies automatically fall under corporate income tax, while others can choose to be taxed under income tax.
Companies Selectively Subject to Corporate Income Tax
The following companies can choose to be subject to corporate income tax:
- Entrepreneur Individuel à Responsabilité Limitée (EIRL) - Sole Proprietorship with Limited Liability
- Entrepreneur Individuel (EI) - Sole Proprietorship (in this case, it opts for assimilation to an EURL)
- Entreprise Unipersonnelle à Responsabilité Limitée (EURL) - Single-Person Limited Liability Company
- Société en Nom Collectif (SNC) - General Partnership
- Société en Commandite Simple - Limited Partnership
- Société en Participation - Partnership
- Société Civile Immobilière (SCI) - Real Estate Civil Company (as mentioned in article 8 of the tax code)
- Société de Fait - De Facto Company
In these cases, even if your profits are normally subject to personal income tax, you can choose to pay corporate income tax.
3. What is the Corporate Income Tax Rate for Your Company?
Normal Corporate Income Tax Rate for 2024
In 2024, regardless of the company's turnover, the corporate income tax rate is set at 25%.
Reduced Corporate Income Tax Rate for 2024
The reduced corporate income tax rate of 15% applies to SMEs:
- with an annual turnover excluding tax of less than 10 million euros,
- and whose capital is entirely reinvested and held by individuals for at least 75%.
Since January 1, 2023, this reduced rate applies to the portion of profits up to 42,500 euros. Beyond this amount, profits are taxed at the normal corporate income tax rate of 25%.
4. How to Declare and Pay Corporate Income Tax?
Declaration of Results
Regardless of whether your company uses the normal actual taxation system or the simplified actual system, you must electronically declare your results through an EDI partner.
Companies subject to a simplified taxation system can also declare their results from their subscriber space in EFI mode (Electronic Form Interchange).
The deadline for filing the result declaration depends on the end date of the accounting year:
- For a financial year ending on December 31 of the previous year: no later than the second working day following May 1 of the current year,
- For a financial year ending on another date: filing no later than three months following the end of the accounting year,
- In case of cessation of activity: within 60 days.
Payment of Corporate Income Tax
The payment of corporate income tax must be made electronically.
To pay corporate income tax, you must pay four installments using payment notice n°2571. The amount of installments is calculated based on the results of the last completed period.
The payment schedule for installments varies depending on the end date of the accounting year.
Looking for professional tax services? Micco collaborates with professional accounting firms to provide you and your company with expert tax services. Make your corporate income tax processing more efficient; trust Micco to make your financial management easier.
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