You formed your French company from London, New York, Dubai or Singapore, the Kbis arrived, and now two letters land in your inbox: one about corporate income tax (impôt sur les sociétés, universally shortened to IS) and one about value added tax (taxe sur la valeur ajoutée, or TVA, the French name for VAT). Both arrive faster than most foreign founders expect, both carry instalment calendars that start before you feel established, and both punish late reactions with surcharges that compound while you are still looking for an accountant who answers in English. This guide explains, in English and with the exact French legal references your adviser needs, how a company owned or run from abroad registers for IS and VAT in France, pays on time, keeps foreign profits out of the French base where the treaty allows it, invoices correctly under the new electronic invoicing rules, recovers VAT refunds, and contests an assessment without boarding a plane.

Three French acronyms will follow you through every paragraph, so let us fix them once. The Kbis is the official identity certificate of your company, issued by the greffe, the clerk’s office of the local commercial court, once your company is entered on the RCS, the registre du commerce et des sociétés (trade and companies register). The DGFIP, the Direction générale des finances publiques, is the tax administration that collects IS and VAT through your local SIE, the service des impôts des entreprises (corporate tax office). The BODACC, the Bulletin officiel des annonces civiles et commerciales, is the official bulletin where company registrations and insolvency events are published. France now registers companies through the Guichet unique, the single online filing portal operated by the INPI (Institut national de la propriété industrielle). Keep these six names in mind: every deadline below runs through one of them.

Our starting point is deliberately practical. Most readers of this vertical already chose their vehicle with our pillar guide to setting up a company in France as a foreign founder: the SAS (société par actions simplifiée, the flexible joint-stock company foreigners use most), the SARL (société à responsabilité limitée, the more rigid limited liability company), or a branch (succursale) of the foreign parent. If you have not yet decided between a branch and a subsidiary, read our branch versus subsidiary comparison first, because the tax mechanics below apply in full to subsidiaries and largely to branches too. If your bank still blocks the capital deposit, our guide to the refused bank account and the right-to-account procedure explains the fix, and our first-year legal calendar puts IS and VAT filings alongside payroll, CFE business tax and annual accounts. What follows assumes the company exists and now has to pay tax like a French company, even though its owner lives abroad.

I. Your French company owes corporate tax (IS): who pays, at what rate, and on which calendar

A. How to register, pay instalments and file your French corporate tax return from abroad

French corporate income tax applies to your company automatically once it is registered, not after a separate tax election. Article 206 of the French Tax Code (Code général des impôts, or CGI) provides that “sont passibles de l’impôt sur les sociétés, quel que soit leur objet, les sociétés anonymes”, and the same paragraph extends the charge to the SARL and, by combination with the company-law provisions, to the SAS that foreign founders use most. In plain English: if you incorporated a SAS, a SARL or a SA in France, that company is an IS taxpayer from its first day, whether or not it has made a euro of profit yet, and whether its shareholder lives in Paris or in another country. The SAS itself is defined by article L. 227-1 of the Commercial Code as a company whose members “ne supportent les pertes qu’à concurrence de leur apport”, meaning shareholders risk only their contributions, but the company itself is fully taxable on its profits.

Registration for IS requires no separate step beyond company registration, but you must make sure the tax office knows the company exists and where to send correspondence. In practice the Guichet unique transmits the creation file to the tax administration, and the SIE of the registered office (siège social) opens the tax file. From abroad, the two mistakes that create the first penalties are a wrong correspondence address and a bank account that cannot pay by SEPA direct debit. Give the SIE a monitored French correspondence address (your accountant’s office or your lawyer’s office with a forwarding mandate) and a SEPA-capable account the day the Kbis arrives. Our pillar guide explains how the bank account, Kbis and VAT number fit together at incorporation; the tax point is simple: an assessment you never received still becomes enforceable, and “I live abroad” is never a defence to a missed instalment.

The rate you will pay is set by article 219 of the Tax Code: “Le taux normal de l’impôt est fixé à 25 %.” That single sentence governs every euro of ordinary profit of your French subsidiary. Below it sits a valuable reduced rate for small companies: where turnover stays under 10 million euros, “le taux de l’impôt applicable au bénéfice imposable est fixé, dans la limite de 42 500 € de bénéfice imposable par période de douze mois, à 25 % pour les exercices ouverts en 2001 et à 15 % pour les exercices ouverts à compter du 1er janvier 2002”. In current terms, the first 42,500 euros of profit of an eligible SME are taxed at 15% instead of 25%, a saving of roughly 4,000 euros a year that many foreign-owned startups leave unclaimed because nobody checks the eligibility boxes. Tell your accountant in writing whether the French company, alone or with the group to which it belongs, stays under the turnover ceiling, because the test can aggregate group turnover. Long-term capital gains on qualifying participations follow their own 15% and 10% tracks under the same article, which matters the year you sell shares or a business line.

IS is assessed once, for the whole company. Article 218 of the Tax Code states that “l’impôt sur les sociétés est établi sous une cote unique au nom de la personne morale ou association pour l’ensemble de ses activités imposables en France”. One company, one tax bill covering all French activities: you cannot split the Paris consulting profits from the Lyon warehouse profits into separate filings. For a foreign group this unity has a sharp consequence. If the French subsidiary and a French branch of the same foreign parent both earn French-source profits, each structure is taxed on its own scope, but inside each structure the bill is single. Keep analytical accounting per site for management, but file one return per legal entity.

The calendar is where foreign directors suffer most. IS is paid in advance, in four quarterly instalments (acomptes), with a final settlement (solde) after the annual return fixes the exact profit. Miss an instalment and surcharges start running automatically; the administration does not send a polite reminder first. The return itself is governed by article 223 of the Tax Code: “la déclaration du bénéfice ou du déficit est faite dans les trois mois de la clôture de l’exercice.” A company closing on 31 December files in the spring; a company with an off-calendar year-end counts three months from its closing date. File online through the professional account (espace professionnel) on impots.gouv.fr, pay by SEPA, and keep the filing receipt: when you later contest, the receipt proves the date and the figures the administration must answer. Loss-making years still require the return, because declared losses (déficits reportables) are the stock that shelters future profits, and an unfiled loss is a lost asset.

From abroad, organise three reflexes before the first year-end. First, appoint a French chartered accountant (expert-comptable) with a written engagement letter covering IS instalments, the annual return and VAT, not just bookkeeping; the instalment dates do not wait for you to find one in March. Second, give that accountant a SEPA mandate on an account that actually holds funds on instalment dates, with an alert threshold, because a rejected direct debit triggers both bank fees and tax surcharges. Third, calendar the return deadline from the closing date the day the company is registered, and diary a reminder six weeks earlier to close the books. Companies that do these three things from the Kbis date almost never pay their first penalty; companies that “wait until the business starts” pay it within eighteen months. If the company also employs staff, synchronise the tax calendar with payroll and social filings using our first-year calendar so one deadline never hides another.

B. How to keep foreign profits out of French tax and contest an IS assessment from abroad

The most expensive question foreign groups ask is also the simplest: does France tax only the French profits, or everything that passes through the French company? The answer starts with article 209 of the Tax Code, which provides that “les bénéfices passibles de l’impôt sur les sociétés sont déterminés d’après les règles fixées par les articles 34 à 45 , 53 A à 57 , 108 à 117 , 237 ter A et 302 septies A bis et en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”. Only profits earned through operations conducted in France enter the French base, plus profits whose taxation France receives under a double-tax treaty. Profits earned by the foreign parent on its own account, with its own staff and premises abroad, stay outside the French return even if the same individuals own both companies. The reverse is equally true: the moment the foreign parent habitually does business in France through the French company, a warehouse team, or a dependent person who signs contracts here, the administration will argue that an autonomous French establishment exists and pull the corresponding margin into IS.

The courts apply this test fact by fact, and one recent case every foreign group should know is the dispute of the Romanian company SC Acco-Man SRL. In its judgment of 26 November 2020, no. 18NT04049, the Nantes administrative court of appeal recalled that “La société SC Acco-Man SRL a demandé au tribunal administratif de Caen de prononcer la décharge, en droits et pénalités, des cotisations supplémentaires d’impôt sur les sociétés auxquelles elle a été assujettie au titre des exercices clos en 2011 et 2012 et des rappels de taxe sur la valeur ajoutée au titre de la même période.” The court then restated the governing principle: “Il résulte de ces dispositions que ne sont passibles de l’impôt sur les sociétés que les seuls bénéfices réalisés dans des entreprises exploitées en France dans le cadre d’un établissement autonome ou dont l’imposition est attribuée à la France par une convention internationale relative aux doubles impositions.” The lesson for a foreign founder is concrete. If your French SAS has its own office, staff or habitual activity in France, assume its French margin is taxable here and organise proof of where each contract is negotiated and performed. If instead you merely hold shares in France while the real business stays abroad, keep the evidence of that separation (leases, payroll, travel records, contract signatures) from day one, because the administration taxes appearances first and lets you prove the reality later. A second illustration comes from Paris, where the Paris administrative court of appeal, no. 22PA03519 (Teads France), worked through the same formula that “les bénéfices passibles de l’impôt sur les sociétés sont déterminés (…) en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”, this time on a restitution claim for IS already paid. Same rule, opposite direction: where the French base was overstated, the overpaid tax can be reclaimed with interest, but only with accounts that isolate the French operations cleanly.

Treaties overlay this domestic rule without replacing it. France has signed more than one hundred double-tax conventions, and each one allocates taxing rights article by article: business profits to the state of the establishment, dividends and interest with capped withholding, dispute resolution by mutual agreement. Before you move margin between the French subsidiary and the foreign parent, read the specific convention with your country line by line, not a summary, and check who must issue the residence certificate that unlocks the reduced withholding rate. Dividends a French SAS pays to a foreign parent suffer French withholding at the domestic rate unless the treaty, or the European parent-subsidiary regime for EU parents, reduces it on production of the right certificate before payment. Interest on a shareholder loan from abroad, the instrument our shareholder-loan guide describes for funding the company, is deductible only within statutory limits and at a market rate; above that, the excess is reclassified as a distribution and taxed accordingly. Price every intra-group flow (management fees, royalties, goods, loans) as if the other side were a stranger, document the comparables, and keep the contracts signed and dated. The transfer-pricing adjustment is the single most frequent IS reassessment against foreign-owned French companies, and it always arrives with the reproach that the paperwork was created after the audit began.

When the reassessment letter (proposition de rectification) arrives, the procedure favours the taxpayer who answers fast and in French administrative form. First, reply to the auditor within the stated deadline, point by point, attaching the contracts, invoices and bank statements that prove each fact; silence at this stage hardens into deemed acceptance of the figures. Second, if the assessment is maintained, file the formal claim (réclamation) that the Code requires before any court action. Article R*190-1 of the Tax Procedure Book (Livre des procédures fiscales) provides that “Le contribuable qui désire contester tout ou partie d’un impôt qui le concerne doit d’abord adresser une réclamation au service territorial, selon le cas, de la direction générale des finances publiques ou de la direction générale des douanes et droits indirects dont dépend le lieu de l’imposition.” Send that claim by registered letter with acknowledgment of receipt (lettre recommandée avec accusé de réception) or through the online messaging of the professional account, within the statutory claim period, stating the tax, the years, the amounts and the legal grounds, and request suspension of enforced collection (sursis de paiement) where the Code allows it so the bailiff (huissier, now titled commissaire de justice) does not seize the account while the dispute runs. Our guide to the seized bank account explains that seizure procedure, and our unpaid-invoice guide shows the civil courts that run in parallel when customers, not the Treasury, owe you money. If the claim is rejected expressly or by silence, the administrative court (tribunal administratif) of the registered office hears the appeal, and a French lawyer can represent you without your physical presence at most stages. Never pay a disputed assessment “to be quiet” without writing that payment is made under reservation (sous toutes réserves), and never ignore the collection letters while the claim is pending: prescription and enforcement run on separate clocks.

II. Your French company must charge French VAT: registration, reverse charge, e-invoicing and refunds

A. How to get a French VAT number, file VAT returns and use the reverse charge from abroad

VAT (taxe sur la valeur ajoutée) is the tax your French company collects from its customers on behalf of the Treasury, then pays over after deducting the VAT it paid its own suppliers. The standard rate is 20%, with reduced rates for specific goods and services, and the mechanism starts the day operations begin. Article 286 of the Tax Code imposes the entry step: “Toute personne assujettie à la taxe sur la valeur ajoutée doit : 1° Dans les quinze jours du commencement de ses opérations, souscrire au bureau désigné par un arrêté une déclaration conforme au modèle fourni par l’administration.” Within fifteen days of starting to trade, the company must file the declaration that opens its VAT file and delivers the intra-Community VAT number (numéro de TVA intracommunautaire, the FR-prefixed number customers across Europe will check before paying). In practice the Guichet unique creation file triggers much of this automatically, but verify the number exists on the European VIES database before issuing the first invoice: invoicing without a valid number, or with a supplier’s unchecked number, is the classic first-year fault that blocks input-VAT deduction later. A separate declaration is equally required when operations cease, so close the file cleanly if the company stops trading rather than letting blank periods accumulate.

Who actually pays the VAT on each transaction depends on where the supplier sits. The default rule in article 283 of the Tax Code is that “La taxe sur la valeur ajoutée doit être acquittée par les personnes qui réalisent les opérations imposables”, meaning the seller charges VAT and remits it. But where a supply of goods or services covered by the territoriality rules is made by a supplier established outside France, the same article shifts the burden to the French buyer through the reverse charge (autoliquidation): the French customer self-assesses the VAT as both collector and deductor, so no cash changes hands on the tax line. For a foreign group this mechanism runs in both directions. When your foreign parent bills the French subsidiary for management fees, software licences or intra-group services, the French subsidiary usually self-assesses the French VAT on that purchase. When your French SAS sells services to business customers in another EU state, the reverse charge often applies in the customer’s state and your invoice goes out without French VAT, with the customer’s VAT number shown and the transaction reported on the European sales statement (état récapitulatif, formerly DEB/DES Intrastat-style reporting). Get the first three invoices of each new flow reviewed before sending: the wrong VAT line cannot be fixed by a credit note once the customer has deducted it, and the administration fines the paperwork even where no tax was lost.

Goods add customs to the picture. If the French company imports equipment, stock or samples from outside the EU, import VAT is assessed at the border and, under the generalised reverse-charge mechanism, declared and deducted on the same VAT return rather than paid in cash to customs, provided the company holds the authorisation and reports correctly. Our import-VAT guide walks through that border-to-return chain for a founder living abroad, including how to contest a customs reassessment. Inside the EU, arrivals of goods are declared as intra-Community acquisitions on the French return with the same self-assessment logic. Returns themselves are filed monthly or quarterly depending on turnover and VAT balance, exclusively online through the professional account, with payment by SEPA on the filing date. A company that files late twice in a row is moved to monthly filing and closer monitoring, so treat the VAT return like payroll: same day each period, same person responsible, receipt archived. Where the company only makes exempt or out-of-scope supplies (certain financial, medical or intra-group flows), confirm the partial-exemption position in writing before stopping filings, because “no VAT due” and “no return due” are different answers and only the second stops the calendar.

B. How to invoice correctly, switch to mandatory e-invoicing and recover VAT refunds from abroad

Every VAT deduction in France stands or falls on the invoice. Article 289 of the Tax Code requires that “Tout assujetti est tenu de s’assurer qu’une facture est émise, par lui-même, ou en son nom et pour son compte, par son client ou par un tiers”, for each supply to another business or to a non-taxable legal person that is not exempt. The compliant invoice states the full identities and VAT numbers of both sides, the date of issue and of the supply, a sequential number, the precise description and quantity of each line, the price exclusive of tax, the applicable rate and the VAT amount per rate, and the total. From abroad, impose one template, one numbering sequence per company, and no invoice issued from a personal mailbox or a foreign-parent letterhead: mixed stationery is how auditors reconstruct undeclared activity, and gaps in numbering are treated as hidden sales until proven otherwise. Keep every purchase invoice too, because input VAT is deductible only with a compliant supplier invoice in hand, and the SIE routinely rejects deductions backed by pro-forma documents, order confirmations or foreign receipts that lack the mandatory particulars.

France is now converting this paper discipline into structured electronic data. Article 289 bis of the Tax Code provides that “l’émission, la transmission et la réception des factures relatives aux opérations mentionnées aux a et d du 1 du I dudit article 289 ainsi qu’aux acomptes s’y rapportant s’opèrent sous une forme électronique, selon des normes de facturation électronique définies par arrêté du ministre chargé du budget”. In practice, business-to-business invoices between French-established companies must travel as structured e-invoices through an authorised platform (plateforme agréée) or the public portal, with transaction data (e-reporting) covering the flows the invoice itself does not carry, and the rollout proceeds in statutory stages by company size. A foreign-owned SAS is inside the reform as soon as it invoices French business customers: check the current stage calendar on impots.gouv.fr, register the company on the chosen platform well before the mandatory date, map the chart of accounts to the required transmission formats, and train whoever issues sales documents, because a PDF attached to an email no longer counts once the company crosses into the mandate. Penalties for missing or non-compliant e-invoices apply per invoice and accumulate brutally across hundreds of monthly bills, so the platform choice and the numbering discipline belong in the same decision.

Where input VAT exceeds collected VAT, the balance is a credit, and a structural creditor (exporters, intra-group service providers, companies in their investment phase) can claim a refund (remboursement de crédit de TVA) instead of carrying the credit forward. File the refund claim on the prescribed form with the return, attach the bank details (relevé d’identité bancaire) of an account that accepts SEPA transfers in the company’s name, and expect the SIE to ask for the largest purchase invoices before paying: first refunds to foreign-owned companies are systematically screened, and a clean, indexed file gets paid in weeks while a loose file waits months. Refusals and partial payments follow the same dispute path as IS. Article R*190-1 of the Tax Procedure Book sends the taxpayer first to “une réclamation au service territorial, selon le cas, de la direction générale des finances publiques ou de la direction générale des douanes et droits indirects dont dépend le lieu de l’imposition”, which covers both the SIE for domestic VAT and customs for border VAT. Claim within the statutory period, quantify each invoice in dispute, and keep trading while the claim runs: stopping filings during a dispute converts a winnable refund into a certain penalty. Companies that invoice correctly, transmit e-invoices on time and claim refunds with indexed proof almost never litigate; companies that improvise the paperwork litigate every year.

Conclusion

A French company owned from abroad pays tax exactly like a French-owned one, but its director cannot fix a missed deadline with a morning visit to the tax office. The discipline that replaces proximity has four parts: register correctly so the SIE and customs know the company from the Kbis date; pay IS in its quarterly rhythm at 25%, with the 15% SME band claimed where eligible, and file the return within three months of closing; run VAT from the fifteen-day declaration through reverse-charged intra-group flows, compliant invoices and the staged e-invoicing mandate, claiming refunds with indexed proof; and contest quickly and in the Code’s forms, from the auditor’s reply to the R*190-1 claim, before the administrative court if needed. The CAA Nantes ruling on SC Acco-Man SRL is the permanent reminder behind all four: France taxes the profits of enterprises operated here, through an autonomous establishment or by treaty attribution, and exempts the rest, but the taxpayer who cannot show where each margin was earned pays on the whole picture. Set the three reflexes from Part I, the invoice discipline from Part II and the shared incorporation foundations together, and the French company becomes what it should be: a taxable but predictable vehicle whose owner sleeps abroad and whose files answer in Paris.

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A 48-hour telephone consultation with a lawyer of the firm for your French company’s corporate tax or VAT position. Call +33 6 46 60 58 22 or write through our contact page with your Kbis, the disputed assessment or the draft invoice flow. We answer in English, work from the exact French texts quoted above, and tell you within the first call whether the position is registration, payment, refund or litigation.