France

Exceptional contribution on the profits of large companies (2025)

The French Finance Bill for 2025 introduced an exceptional contribution on the profits of large companies (i.e. stand-alone companies liable for corporate income tax [CIT] whose turnover is ≥ EUR 1 billion [turnover generated in France during the current OR the previous FY] or parent company of a tax consolidated group when the aggregate turnover of the group exceeds this threshold).

This contribution is only applicable for the first FY ending on or after 31 December 2025. The taxable basis corresponds to the average of the CIT due for the current FY and the previous one, based on total taxable profits before applying tax reductions, credits and tax receivables of any nature.

The applicable rates are the following:

*25% CIT / 3,3% additional contribution (disregarding relief) / exceptional contribution

**10% CIT / 3,3% additional contribution (disregarding relief) / exceptional contribution

A smoothing mechanism allows to moderate the threshold effect, for companies whose turnover slightly exceed these thresholds of EUR 1 billion or EUR 3 billion. The exceptional contribution is not deductible from the taxable income.

Tax on capital reductions resulting from the buyback of their own shares by large companies

The French Finance Bill for 2025 introduced a tax on capital reductions resulting from the buyback of their own shares by large companies (i.e. French companies with individual or consolidated turnover > EUR 1 billion in the last FY). The new tax applies to capital reductions resulting from share buyback operations with few exceptions.

The rate of the tax is 8 % and the tax base is very specific (and not directly related to the fair value of the shares). It is not deductible from the taxable income.

Non-income taxes: CVAE (companies’ added value contribution)

An additional contribution to the CVAE will apply in 2025 (French Finance Act for 2025). It corresponds to 47.4% of the CVAE.

Note that CVAE was initially due to be abolished as of 2027 (French Finance Act for 2024). However, the French Finance Act for 2025 has enacted the postponement of this abolition which is now scheduled for 2030.

Public Country-by-Country (CbC) Reporting

In 2023, France implemented the Public Country-by-Country Reporting (CbCR) Directive into the French law to enhance transparency on the activities, results, and taxation of multinational companies in the EU. The obligation to publish a Public CbCR applies to fiscal years beginning on or after 22 June 2024, with the return to be published within 12 months of the financial year's end.

Multinational enterprises (MNEs) based in France and non-EU based MNEs operating in France through branches or subsidiaries, with total consolidated revenue exceeding EUR 750 million in each of the last two consecutive financial years, must publicly disclose certain income tax information specified by the French Commercial Code. Companies may choose to present this information in their public CbCR in the same format as their tax CbCR or in accordance with the French Commercial Code provisions.

The public CbCR must be published in the commercial court clerk's office and made available to the public. Companies can defer the publication of sensitive information, provided they state the reasons for non-publication, and publish the deferred information in a subsequent public CbCR within five years. While the French Commercial Code does not specify sanctions for non-compliance, any person can request the court president to compel the publication of the report.

Although tax and public CbCR share similarities, their definitions and interpretations differ. Companies must anticipate this reporting obligation and define how they will present the information in their public CbCR.

Beneficial owner: Key decision in 2024 from the French Administrative Supreme Court

A key decision (Conseil d'Etat, 20 May 2022, n°444451, Sté Planet) has recognised, for the first time, the applicability of a reduced withholding tax (WHT) rate provided by the Double tax treaty (DTT) between France and the State of the beneficial owner (i.e. as being the indirect effective beneficiary of the income paid), as opposed to the withholding rate provided by the tax treaty between France and the state of the direct beneficiary of the income (in the case at hand, royalties), subject to several specific conditions.

In a decision in 2024 the Supreme court (Conseil d’Etat, 8 November 2024, n°471147, Foncière Vélizy Rose) has extended this approach to dividends distribution.

New 'green industry tax credit' ('crédit d'impôt au titre de l’investissement dans l'industrie verte' (C3IV))

The 2024 Finance Bill introduced a tax credit for green industry, corresponding to 20 % of the investment (and up to 60 % depending on the geographic area of the investment and the size of the enterprise). The tax credit is capped to EUR 50 million per enterprise company (and up to EUR 200 million or EUR 350 million in the case of investments in specific geographical areas). 

Eligible investment are expenditures incurred in connection with activities contributing to the production of batteries, solar panels, wind turbines and heat pumps. 

This tax credit applies to investment plans approved by the tax authorities no later than 31 December 2025.

Electronic e-invoicing reform postponed 

Officially announced in a press release on 28 July 2023, the postponement of the entry into force of the e-invoicing reform, originally scheduled for 1 July 2024, has been enacted, by the Finance Act for 2024. 

The new timetable for implementing the e-invoicing reform is now as follows: 

• In 2025 (month to be confirmed): opening of the pilot phase (instead of 1 January 2024);
• 1 September 2026: obligation to issue e-invoices for large and mid-sized companies - instead of 1 July 2024 and 1 January 2025 respectively; 
• 1 September 2027: obligation to issue e-invoices for SMEs, instead of 1 January 2026. 

As of 1 September 2026, the reception of electronic invoices will apply to all companies, whatever their size. 

Customs

The Union customs code (UCC), which came into force on 1 May 2016, originally provided for the implementation of interoperable national information systems.

However, the UCC and its delegated regulation granted a transitional period to Member States to develop and adapt their IT systems by 31 December 2025, with the aim of dematerialising and facilitating the exchange of information between them.

In this context, a new customs clearance service, DELTA I/E (import/export) has been introduced in France. The import part of the DELTA I/E is already in service, with a transition period until May 2025. This service will gradually become the norm and is to replace all existing customs clearance applications (DELTA G, ECS BC, DELTA X import and DELTA X export).

Within the framework of DELTA I/E, the current customs declaration, the Single Administrative Document (SAD) is replaced by an electronic message including approximately 120 data elements.

France plans to implement the export part of the new customs clearance service at the end of 2025, with a transitional period between 15 October 2025, and 14 December 2025. Beyond 14 December 2025, it should no longer be possible to submit new export declarations in DELTA G/X export – ECS.