Corporate - Other taxes

Last reviewed - 01 August 2023

Value-added tax (VAT)

VAT is due on goods sold and services rendered in France. The standard VAT rate is 20%. Sales of certain kinds of medicines and transports of persons are subject to the 10% VAT rate. Food products, subscriptions to gas and electricity (under certain circumstances), sales of books, and products and services provided to disabled persons are subject to the 5.5% reduced VAT rate. Other specific sales and services are subject to the 2.1% VAT rate ​(such as drugs that are reimbursable by social security, press). Supplies of goods outside France and certain specific services invoiced to foreign clients are, in principle, exempt from VAT.

Business-to-business (B2B) suppliers of services are generally taxable at the location of the customer and not at the location of the supplier. For business-to-consumer (B2C) supplies of services, the place of taxation is generally where the supplier is established.

VAT applies only to taxable persons, partly taxable persons, and non-taxable legal persons that are registered for turnover taxes.

Specific VAT rules apply to leases of transportation equipment; cultural, arts, and sports services; TV, radio, electronic, and telecommunication services; and transportation of goods.

Customs duties

Depending on their country of origin, goods may be subject to customs duties. The rules are aligned with the EU customs regulations.

Under certain circumstances, the payment of the duties can be deferred depending on the terms and conditions of the warehousing arrangements.

Excise taxes

Some specific goods are subject to excise duties, notably:

  • Alcohol and alcoholic drinks (e.g. wine, beer, ethylic alcohol).
  • Processed tobaccos (e.g. cigars, cigarettes, tobacco).
  • Oil and gas products.

Environmental taxes

In France, the use of environmental taxes is justified by the 'polluter pays' principle. Thus, three quarters of environmental taxes are still based on energy consumption, mainly on fossil fuels (i.e. domestic tax on the consumption of energy products, so-called 'TICPE'), but also on electricity (domestic tax on the final consumption of electricity, so-called 'TICFE') and natural gas (domestic tax on the consumption of natural gas, so-called 'TICGN').

In addition, France levies more specific taxes. For example, taxes on transport, excluding fuel (e.g. tax on motorway concessionaires, axle tax). There are also incentive taxes, such as the eco-contribution on paper and electronic and electrical equipment, which aim to make producers of products generating environmental waste more responsible.

Real estate tax

All properties located in France are subject to a 3% real estate tax. The tax is assessed annually on the fair market value of the real estate, in proportion to the direct or indirect interest held. All entities in the chain of ownership are jointly liable for the payment of the tax.

Automatic exemptions apply in three situations. First, to entities whose French real estate assets represent less than 50% of their total French assets. Second, to entities listed on a regulated market whose shares, units, or rights are significantly traded on a regular basis. Third, to entities having their registered office in France, in an EU member state, or in a country that has concluded a double tax treaty (DTT) with France providing for an administrative assistance or a non-discrimination clause, where:

  • their direct or indirect interest in the French real estate is less than either EUR 100,000 or 5% of the fair market value of the French real estate
  • they are pension funds or public charities recognised as fulfilling a national interest whose activities justify the need to own French real estate, or
  • they are non-listed French real estate funds (société de placement à prépondérance immobilière à capital variable [SPPICAV] or fonds de placement immobilier [FPI]) or foreign funds subject to equivalent regulations.

Where an automatic exemption does not apply, a claim may be submitted for conditional exemption upon communication or the undertaking to communicate to the French tax authorities information concerning the real estate and the shareholders. From 2021, entities subject to the French 3% real estate tax will have to submit their tax returns in a dematerialised way. This implies that foreign entities be duly registered in France.

Territorial economic contribution

The territorial economic contribution (Contribution Economique Territoriale or CET) is comprised of two different taxes: the companies’ land contribution (Cotisation Foncière des Entreprises or CFE) and the companies’ added value contribution (Cotisation sur la valeur ajoutée des entreprises or CVAE). Although they have a similar scope, the taxes are subject to very different rules.

The CFE tax is based on the rental value of assets that are subject to the real estate tax, excluding movable goods and equipment. For industrial plants, the taxable base is reduced by 30%. There is a specific rental value for each town and an upgrading ratio is set forth at the national level each year.

The CVAE is based on a company’s added value. Only taxpayers that are not exempt from the CFE and whose turnover is greater than EUR 152,500 are subject to CVAE. However, tax relief equal to the amount of the tax is provided for companies whose turnover is below EUR 500,000. The tax rate for companies whose turnover ranges from EUR 500,000 to EUR 50 million is assessed according to a progressive scale. The Finance Bill for 2023 provides for the repeal of the business value-added contribution (so called “CVAE”, one of the components of the CET) over a two-year period. In practice, the CVAE rate will be halved in 2023 before the tax disappears in 2024.

In parallel with the abolition of the CVAE, the rate of the cap on territorial economic contribution (CET) according to value added, currently set at 2%, will be lowered to 1.625% in 2023 and then to 1.25% from 2024.

There is an upper ceiling on the added value that applies to the CET. As a consequence, tax relief applies and is equal to the excess of the sum of CFE and CVAE over 2% of the added value of the company as of 2021 (instead of 3% previously).

Registration duties

Registrations duties mentioned hereafter are imposed on the purchaser. However, the seller may be liable for these duties in case of non-settlement by the purchaser.

Transfer of goodwill

The transfer of goodwill is subject to a registration duty at a rate of 3% on the part of the transfer price amounting from EUR 23,000 to EUR 200,000 and at a rate of 5% on the part exceeding EUR 200,000.

Transfers of shares

The transfer of shares is subject to registration duty at a rate of 0.1% with no cap. The transfer of listed shares recorded by a deed is subject to registration duty at a rate of 0.1%.

Transfer of interest or quotas in legal entities whose capital is not divided into shares

The transfer of interests or quotas in legal entities whose capital is not divided into shares (e.g. Société à responsabilité limitée [SARLs] or Société en nom collectif [SNCs], which are a form of private limited liability corporate entity) is subject to a registration duty of 3% with no cap.

Transfer of shares in non-quoted real estate companies

The transfer of shares in non-quoted companies whose assets consist principally of immovable property (or rights related to such immovable property) is subject to a registration duty of 5% with no cap.

Transfer of real estate

The sale of land and buildings is subject to registration duty at a rate of 5.80% on the transfer price, including expenses.


Several exemptions are added to the list of the transactions that are not subject to transfer duties:

  • Transactions subject to the FTT.
  • Repurchase by companies of their own shares intended to be sold to the subscribers of a company employee saving plan, with some exceptions.
  • Transactions between companies in the same group within the meaning of Article L233-3 of the French Commercial Code.
  • Transfer of ownership resulting from a merger, a contribution, or a spin-off made under the provisions of Article 210 A and 210 B of the FTC and acquisition shares of a company by its employees.

Exit tax rules in case of transfer of French head office or establishment

In the case of a transfer of assets outside France as part of a transfer of a head office or an establishment, unrealised gains are immediately taxable. However, in the case of a transfer to an EU member state or, under certain conditions, to a European Economic Area (EEA) member state, taxpayers are able to either pay the full amount of tax immediately or pay it over five years in five equal instalments.

Payroll tax

Companies that are not liable for VAT on at least 90% of their annual turnover are subject to payroll tax (taxe sur les salaries) regarding salaries paid during the following calendar year. Companies below the 90% threshold trigger are liable for the payroll tax on the complement of their VAT recovery ratio, called the counter VAT recovery ratio.

The standard rate of the payroll tax is 4.25%, but increased rates apply to gross individual wages that exceed certain thresholds. Those increased rates are:

  • 8.5% for wages ranging from EUR 8,020 to EUR 16,013.
  • 13.6% for wages in excess of EUR 16,013.

French social security contributions

The French social security system is composed of various schemes providing a wide range of benefits. This system includes social security basic coverage, unemployment benefits, compulsory complementary retirement plans, complementary death/disability coverage, and complementary health coverage.

The contributions are shared between employer and employee; on average the employer's share of contributions represents 45% of the gross salary. For 2022, the employee’s share of French social contributions represents approximately 20% to 23% of the remuneration. However, since the contributions are assessed using various ceilings, the average rate will decrease as the gross salary increases.

Employers' contributions made to additional medical coverage schemes (which are mandatory and collective) are taxable.

Generally, for any employee who carries out a salaried activity in France, the employer withholds the employer's and employee's share of French social security charges.

Financial transaction tax (FTT)

FTT applies to acquisitions for consideration of equity securities or similar securities in the meaning of the French Monetary and Financial Code issued by certain French-listed companies (i.e. financial instruments giving access to capital or to voting rights in the company and securities issued under foreign law representing French-eligible securities). FTT applies regardless of whether the transaction is executed inside or outside of France.

The tax is due by the investment service provider (ISP) that has executed the purchase order or, when there is no ISP, by the custodian, irrespective of its place of establishment.

In most cases, the central securities depositary will be in charge of centralising the collection of the tax, the reporting to the French tax authorities, and the payment of the tax to the French Treasury.

The tax is computed based on the acquisition price of the shares.

The FTT rate is equal to 0.3% for acquisitions made on or after 1 January 2017.

Digital services tax 

As of 1 January 2019, a 3% digital tax applies to companies providing certain digital services in France with global annual revenue in excess of EUR 750 million and annual revenue in France in excess of EUR 25 million. The tax applies, in particular, to the provision of a digital interface by means of electronic communications allowing a user to contact and interact with other users, as well as services to advertisers or their agents aimed at placing targeted advertising messages on the digital interface based on the interface user's data collected or generated through the case of such interface.