When a foreign founder incorporates a company in France, the first corporate tax payment is often misunderstood. A new French company that is subject to impôt sur les sociétés (IS), the French corporate income tax, normally does not pay quarterly IS instalments during its first accounting period. That does not mean that the first year is tax-free. The company must still prepare its first taxable result, file its annual return and pay the balance when it falls due. The date depends mainly on the first accounting closing date, not on the date on which the founder receives the company’s Kbis (the official company registration extract) or opens a bank account.

This distinction matters for a foreign-owned SAS (simplified joint-stock company), SASU (single-member simplified joint-stock company) or SARL (limited liability company). The relevant payment may be the first balance payable after the first closing, or the first quarterly advance for the following period. The two dates are different. This article explains the rule in force for a French company subject to IS, including the 15 May rule, the fourth-month rule, the forms 2065, 2571 and 2572, the reduced 15% rate, losses and late-payment exposure. It does not address an individual moving to France or the taxation of a foreign company’s permanent establishment without a French subsidiary.

For the wider incorporation sequence, see the firm’s French company formation and foreign-founder compliance hub; this article focuses narrowly on the first IS payment and the steps that follow the first closing.

I. When does a new French company first pay corporate tax?

A. Does a new SAS, SASU or SARL pay quarterly IS instalments?

The first question is whether the French entity is actually within the IS regime. Under Article 206 of the French General Tax Code (CGI), companies such as a SARL that has not elected for the partnership tax regime, and other profit-making legal persons, may be liable to IS. In practice, the official Service Public guidance on IS lists the SARL, SAS, SASU, SA and several other company forms as subject to IS by default. An EURL, SNC or certain civil companies may instead be subject to personal income tax unless a valid election for IS has been made.

For a newly created company, the decisive rule is in Article 1668 of the CGI. The provision states: Les sociétés nouvellement créées ou nouvellement soumises, de plein droit ou sur option, à l’impôt sur les sociétés sont dispensées du versement d’acomptes during the first accounting period or the first period of taxation. In plain English, the company is dispensed from quarterly advances during that initial period. The provision does not cancel the IS calculated on the profit of that period.

French tax language uses acomptes for advances. They are not an estimate requested by the tax office after an assessment; they are spontaneous payments made by the company, normally calculated by reference to the most recent closed accounting period. The four ordinary dates are 15 March, 15 June, 15 September and 15 December. They are recorded through form 2571, the electronic corporate tax advance statement. A newly created company may therefore have bank movements, payroll and customer invoices during its first year without making a 2571 payment. It must reserve cash for the eventual 2572 balance.

The exemption is also available where an existing company becomes subject to IS for the first time. A foreign founder should not confuse that rule with the separate rule for a company whose total IS is below €3,000. The latter can also be outside the advance-payment cycle, but the legal reason is different. The official guidance confirms three situations in which the company pays IS in one balance rather than by advances: the amount is below €3,000, the company is newly created in its first accounting period, or it has newly become subject to IS in its first taxable period.

Situation	What is normally due during the first period?	What must still be prepared?
New SAS, SASU or SARL subject to IS	No quarterly IS advances for the first accounting period	Accounts, tax computation, 2065 return and the 2572 balance
Existing entity electing for IS for the first time	No advances for the first period of IS	Evidence of the election, accounts, return and balance
Company with IS below €3,000	No advance-payment schedule under the low-tax rule	Annual return and payment of the actual balance
Company that has completed its first period	Advances may begin for the following accounting period	Reference tax result, 2571 statements and cash forecast

The first closing date should be chosen deliberately. A company created in September with a 31 December closing may have a short first period. A company created late in the year with a later closing date may have a longer first period, and the first taxable result will cover the period identified by the accounting records. Article 209 of the CGI contains a specific rule for companies created without a balance sheet during their first civil year: the first taxable result is determined from the start of operations to the first closing, and, at the latest, to 31 December of the year following creation. The founder, director and accountant should therefore document the start of operations, the first closing date and whether the company actually carried on business before the formal registration.

There is another boundary. A French branch of a foreign company is not simply a new French subsidiary in a different form. Its French taxable result, permanent-establishment analysis, accounting records and payment obligations may require a separate review. The same is true if the foreign parent has a French establishment rather than a standalone company. This article’s clear answer about the first-period advance exemption concerns the French legal entity that is newly created or newly subject to IS. The company’s articles of association, tax option and actual activity must be checked before relying on the rule.

B. When is the first corporate tax balance payable?

The first amount that a new French company will usually pay is the IS balance after the first accounting period. The balance is the tax calculated on the taxable result, less credits and less advances already paid. Because a new company normally paid no advances during its first period, the first 2572 payment may represent almost the whole IS liability.

The date follows a simple two-part rule in Article 1668(2) of the CGI. If the accounting period closes during the year, the balance is payable by the 15th day of the fourth month after the closing month. If the period closes on 31 December, or if no accounting period closes during the year, the balance is payable by 15 May of the following year. The current Service Public table gives the same result and identifies form 2572 as the electronic balance statement.

For example, assume that a French SAS begins operations on 1 September 2026 and closes its first period on 31 December 2026. It does not pay quarterly advances during that first period. It files its annual result and pays the IS balance by 15 May 2027 under the 31 December rule. If the first period closes on 30 September 2027, the balance is due by 15 January 2028, the 15th day of the fourth month after the closing month. The exact tax computation may be lower than expected if the company has deductible costs or a loss, but the filing and payment calendar still has to be managed.

The declaration and the payment should be treated as two connected but distinct tasks. Article 223 of the CGI requires the company to file its profit or loss return, generally within three months of closing, with a special rule for a 31 December closing or a year with no closing. The electronic filing process benefits from the additional calendar-day period described by the administration, but a foreign founder should not assume that an extension of the return-filing process automatically moves the specific payment date stated by Article 1668. The company should confirm the operative deadline in its professional tax account and with its French accountant.

The Supreme Administrative Court, in Conseil d’État, 3rd and 8th chambers sitting together, 9 June 2020, no. 417936, described the mechanism as follows: l’impôt sur les sociétés fait l’objet d’un paiement spontané par le contribuable, suivi d’une régularisation lorsque la société dépose sa déclaration de résultats. This is important for a founder accustomed to an assessment notice: French IS is ordinarily paid by the company through the statutory process; the first balance is not simply a bill that appears after a tax audit.

The accounting closing date also has legal significance beyond the payment calendar. In Cour de cassation, commercial chamber, 16 December 2008, no. 08-12.142, the Court held, in the context of insolvency, that the relevant event was la clôture de l’exercice comptable et non pas de la perception des impôts. The case does not replace the current payment dates, but it shows why the closing date, rather than the date on which a customer pays an invoice or the foreign parent sends funding, is central to the legal analysis of the company’s tax liability.

A foreign director should record four dates in the first-year calendar: the date of incorporation, the start of operations, the first accounting closing and the due date for the 2065 return and 2572 balance. The company’s SIREN is its nine-digit French business identification number, its SIRET identifies an establishment, and its SIE is the Service des impôts des entreprises, the business tax office. The Kbis proves registration, but it is not a substitute for the professional tax account, the tax return or the 2572 payment instruction.

II. How should a foreign-owned company calculate and secure the payment?

A. Which rate, tax return and payment form apply?

Once the first payment date is identified, the company must calculate the tax base. Article 219 of the CGI states: Le taux normal de l’impôt est fixé à 25 %. The normal French corporate tax rate is therefore 25% on the taxable profit, subject to the rules and special regimes applicable to the company. A reduced rate of 15% may apply to the first €42,500 of profit when the statutory conditions are met, including the turnover threshold, full payment of share capital and the required 75% ownership by individuals or by a company itself meeting the individual-ownership condition. A foreign parent company must not assume that the reduced rate applies merely because the French subsidiary is small.

The ownership test is a frequent first-year error. A French subsidiary held by a non-French corporate parent may fail the 75% individual-ownership condition, depending on the ownership chain. The result should be checked against the actual share register, capital payment status and the statutory definition. If the 15% rate is used without support, the company may underpay the balance and create an avoidable dispute. The rate should be written into the tax computation with the evidence supporting the turnover and ownership tests.

Taxable profit is not the same as cash received by the company. Under Article 209 of the CGI, the taxable profits of companies subject to IS are determined under the rules referred to in the code and by reference to profits allocated to France under the applicable rules and tax treaties. Article 39 of the CGI provides that net profit is determined after deduction of qualifying charges. The text begins: Le bénéfice net est établi sous déduction de toutes charges. That does not make every payment deductible. The company must still test the business purpose, supporting invoice, accounting period, arm’s-length character of group charges and any specific limitation.

A foreign-owned company should separate at least the following items before estimating the first balance:

• revenue earned by the French entity and the date on which it is recognised;
• payroll, social contributions, office costs, professional fees and other operating expenses;
• shareholder funding, which is not automatically revenue and must be classified as capital, a loan or another documented transaction;
• intercompany service fees, royalties, interest and recharges, with agreements and evidence of the service received;
• depreciation, provisions, foreign-exchange items, exceptional costs and expenses that require a tax adjustment;
• tax credits, withholding taxes or other amounts that may be imputed against the IS balance; and
• a possible deficit, which may be carried forward or, in limited cases, handled under a carry-back mechanism.

A simple illustration shows why the rate and base matter. If an eligible company has €80,000 of taxable profit and satisfies the conditions for the reduced rate, the first €42,500 produces €6,375 of IS at 15%, and the remaining €37,500 produces €9,375 at 25%, for a notional total of €15,750 before credits and other adjustments. If the company is not eligible for the reduced rate, 25% of €80,000 is €20,000. The first payment date remains the same; only the amount changes. This example does not calculate social contributions, local taxes, VAT, tax credits or any group-tax regime.

The filings have different functions. Form 2065 is the annual IS return attached to the tax package. The financial statements and supporting schedules are transmitted electronically through EFI (electronic form filing) or EDI (electronic data interchange), often through an expert-comptable, the French chartered accountant or accounting firm. Form 2571 is used for an IS advance. Form 2572 is used for the balance. A new company that has no advance to pay still needs the annual result return and the 2572 balance when tax is due. The official 2065 form page, the 2571 advance form page and the 2572 balance form page should be kept with the compliance file.

After the first accounting period, the company moves into the ordinary advance cycle. The advances are generally calculated from the latest closed result, so the first advance in the next period may have a provisional or transitional calculation if the first return has not yet been filed. The company should not simply wait for its accounting firm to send a payment request. It should confirm the 2571 instruction in the professional account, map the four dates to its closing date and maintain a rolling cash forecast. Article 1668(4 bis) also allows a company that has already paid enough for the year to stop additional advances in the circumstances stated by the law, but that decision should be supported by a current tax computation rather than a cash intuition.

The foreign parent should also ensure that payment authority is workable. A French subsidiary can be directed by a person living abroad, but the company needs access to its French professional tax account or an authorised EDI provider, a person with authority to approve tax payments and a documented process for receiving notices. The payment file should identify the French entity, its SIREN, the relevant tax period, the 2572 amount and the bank account used. A parent-company transfer should be labelled and reconciled; it should not obscure whether the subsidiary has actually paid its own tax debt.

B. What if the company has no revenue, a loss or a late payment?

No revenue does not automatically mean no filing. A newly incorporated company may have no sales but still have rent, professional fees, payroll, bank costs, software expenses or shareholder-funded activity. It may have a zero result, a loss or a small taxable profit. In each case, the accounting records and the annual tax return must reflect the actual period. A balance of zero is different from an omitted 2065 return, and the first-year advance exemption is different from a waiver of all corporate obligations.

A loss may eliminate the first IS balance, but it should be calculated and reported rather than assumed. The deficit provision in Article 209 treats a deficit as a charge of the following period subject to the statutory limits and conditions. It may therefore reduce a later taxable result, but the company should preserve the trial balance, invoices, payroll records, loan documents and evidence of the French business activity. A foreign parent’s capital contribution is not a tax loss, and a shareholder loan is not a deductible expense merely because the company needs cash. The legal classification must match the contracts and accounting entries.

Late payment creates a separate risk from late filing. Article 1731 of the CGI provides that a delay in paying the relevant tax amounts can attract a 5% surcharge. Article 1727 of the CGI provides that a fiscal debt not paid within the legal time gives rise to late-payment interest, currently set at 0.20% per month in the provision applicable to the period. These amounts may apply even where the company later pays the principal. A foreign founder should not treat the 15 May balance as a date for beginning a payment discussion with the bank; the payment instruction should be ready before the deadline.

The electronic process has its own sanction. Article 1738 of the CGI states that failure to file or pay through the required electronic method may lead to a 0.2% surcharge, with a minimum of €60 in the situations covered by the text. A company whose foreign director cannot log in should appoint an authorised accountant or other delegate before the deadline. Sending paper documents after a failed electronic attempt is not a complete risk-management plan.

Insufficient advances can also be penalised independently of the final annual payment. In CAA Marseille, 4th chamber, 21 December 2018, no. 18MA00667, the court upheld the consequences of an insufficiency in advances and referred to l’insuffisance de deux premiers acomptes exigibles les 15 mars et 15 juin 2011, even though the company subsequently paid the full IS for the year. The facts are older, but the operational lesson remains useful: paying the annual balance later does not necessarily erase an earlier advance-payment problem.

Overpayment is not a reason to deliberately overfund the tax account without a calculation. Under Article 1668(2), an excess may be returned under the conditions in the text. In Conseil d’État, 8th and 3rd sub-sections sitting together, 30 June 2004, no. 242893, the court examined the statutory délai de trente jours imparti à l’administration fiscale for restitution in the relevant circumstances. The company should keep the filed 2572, the payment references and the bank evidence so that any refund or imputation can be reconciled.

The most common first-year mistakes for foreign-owned companies are practical:

1. treating the first-year advance exemption as an exemption from IS;
2. using the incorporation date instead of the accounting closing date to calculate the balance deadline;
3. assuming the 15% reduced rate applies because the French company has low turnover, without checking the ownership test;
4. paying the balance but failing to file the 2065 return and tax package;
5. classifying a foreign-parent transfer without a capital or loan document;
6. forgetting that a loss or no-revenue period still requires reliable accounts and a return;
7. waiting for a paper notice when IS is normally paid spontaneously; and
8. leaving electronic access and payment approval to the last day.

A useful file for the first French tax year contains the articles of association, Kbis, SIREN and SIRET details, bank statements, shareholder funding documents, contracts with the foreign parent, invoices, payroll evidence, the accounting closing decision, the tax computation, the 2065 return, the 2572 balance and every payment confirmation. If the company has a foreign director, the file should also record who is authorised to use EFI or EDI and who will respond to the SIE. That evidence makes it possible to distinguish a genuine tax dispute from a missed administrative step.

Conclusion

For a newly created French company subject to IS, the first quarterly advance is usually not the first tax payment. The company is normally dispensed from advances during its first accounting period, but it must calculate its first taxable result, file its annual return and pay the balance by the 15th day of the fourth month after closing, or by 15 May after a 31 December closing. A foreign founder should verify the entity’s tax regime, first closing date, reduced-rate eligibility, tax base, electronic filing route and payment authority before incorporation becomes a cash-flow problem.

The practical sequence is short: identify the French entity and its IS status; record the first accounting closing; prepare the accounts and tax adjustments; file 2065 and the tax package; submit 2572 and pay on time; then calendar the first 2571 advances for the next period. The governing provisions include Articles 206, 209, 219, 223 and 1668 of the CGI, together with the electronic-filing and late-payment provisions. The exact treatment of a branch, tax option, foreign-parent charge, deficit, treaty or cessation should be reviewed against the company’s documents and the current position of the French tax administration.