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European Company Formation 
Company formation in France Tax facts
Tax facts
INCOME TAX RATES
| Taxable income (EUR) | Tax rate (%) |
|---|---|
| up to 38,120 | 15 |
| from 38,120 – 2,298,228 | 33.33 |
| over 2,298,228 | 33.33 |
VALUE ADDED TAX (VAT)
19.6% on majority of sales of goods/services; reduced or zero rate on certain specific items.
SOCIAL TAXES
All income is subject to Contribution Sociale Generalise (CSG) and Contribution au Remboursement de la Dette Sociale (CRDS).
- Salary income: 8%
- Capital gains and other capital revenues: 11%
CAPITAL GAINS TAX (CGT)
Example: French company sells its shares help in another company
In principle, capital gains are subject to corporate income tax at the standard rate (33.33%). However, as from 1 January 2007, capital gains on shares may be exempt from corporate income tax (except for a 5% lump sum subject to corporate income tax at the standard rate) if the shares qualify as ‘a participation’ for accounting purposes, or for the participation exemption regime (i.e. the company holds at least 5% of the share capital), and are held for at least two years (i.e. the company holds or undertakes to hold them for at least two years).
LOSES
French tax losses can be carried forward without time limit; they can be carried back three years.
TREATY NETWORK
110 countries.
WITHOLDING TAX (non-residents)
Dividends: maximum rate at 25%, reduced to 15% or 0% (European Union) according to international conventions between the countries.
Interest: maximum rate at 25%, reduced to 15% or 0% (European Union) according to international conventions between the countries.
Royalties: tax between 0% - 33.331/3% according to international conventions between the countries.
