You formed a French company from abroad, perhaps a simplified joint-stock company (société par actions simplifiée, known as a SAS) registered with the Paris trade and companies register, and the first profitable year has just ended. Your accountant sends you a French email full of unfamiliar words: impôt sur les sociétés, acomptes, relevé de solde, liasse fiscale. The impôt sur les sociétés, usually shortened to IS, is the French corporate income tax, and it works very differently from the systems most foreign founders know. There is no single year-end payment. Your company pays its tax in advance, in four instalments computed on last year’s profit, files a detailed return a few months after closing its accounts, and can carry losses forward with almost no time limit, provided it does not change its business beyond recognition. This guide explains, in English and step by step, which profits France taxes, what rate applies, how the instalments and the final balance work, which local business taxes sit on top of the IS, what happens to tax losses when the company pivots, and how to challenge a tax bill from abroad. Each rule below is anchored in the exact wording of the French Tax Code (Code général des impôts, known as the CGI) and in recent decisions of the French administrative courts, quoted word for word.

If you have not yet created the company, start with our pillar guide to setting up a company in France as a foreign founder, from the bank account to the Kbis and VAT, which covers registration with the trade and companies register (registre du commerce et des sociétés) and the Kbis certificate, the official extract that proves your company exists. The Kbis is issued by the clerk of the commercial court (the greffe, the registry office of the commercial court). This article takes over where that guide stops: the company exists, it trades, and now it must pay French corporate tax.

I. Which profits France taxes, at what rate, and how the money is actually paid

A. Is your French company liable for IS, and on which profits?

The starting point is simple. Article 206 of the French Tax Code provides that “sont passibles de l’impôt sur les sociétés, quel que soit leur objet, les sociétés anonymes, les sociétés en commandite par actions, les sociétés à responsabilité limitée”, which means that public limited companies, partnerships limited by shares and private limited companies (sociétés à responsabilité limitée, known as SARL) are liable for corporate tax whatever their business purpose. In practice, the standard vehicles foreign founders use, the SAS and the SARL, are both liable for IS as a matter of principle, unless they have validly opted, where the law allows it, for the transparent partnership regime within the permitted time window. A branch (succursale) of a foreign company has no separate legal personality but is taxed in France on the profit attributable to its French operations, while a subsidiary (filiale), which is a French company in its own right, is taxed like any other French company. The full text of the provision is available on Article 206 of the Code général des impôts on Légifrance.

France then taxes only the profits connected to France. Article 209 of the same Code states that the tax base is determined “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”, meaning that only profits earned through businesses operated in France are taken into account, alongside certain listed categories of French-source income and profits attributed to France by an international double-tax treaty. For a foreign founder, this territoriality rule has two faces. The good news is that profits your group earns abroad, outside any French permanent establishment, are in principle outside French IS. The bad news is that everything your French company earns through its French operations is inside the French base, even if you manage the company from London, New York or Dubai and even if the shareholders are all foreign. The place where you live does not move the tax base; the place where the business is operated does. The provision can be read in full on Article 209 of the Code général des impôts on Légifrance.

The standard rate is equally straightforward. Article 219 of the Code provides that “Le taux normal de l’impôt est fixé à 25 %”, which means the normal corporate tax rate is fixed at 25 percent. This single sentence, readable on Article 219 of the Code général des impôts on Légifrance, is the rate your accountant applies to the taxable profit shown in the annual accounts, after the tax adjustments required by French rules. A profit of 200,000 euros therefore produces, before any reduced rate or credit, 50,000 euros of corporate tax.

Small companies, however, may benefit from a significantly lower rate on the first slice of profit. The same Article 219 grants companies whose turnover does not exceed 10 million euros for the year a 15 percent rate, instead of 25 percent, on the first 42,500 euros of taxable profit per twelve-month period. On that first slice, the saving is worth 4,250 euros per year, which matters greatly to a young company. Two further conditions apply and must be checked every year: the company’s turnover must stay at or below the ceiling, and its capital, fully paid up, must be held continuously for at least 75 percent by individuals, or by another company that itself meets the turnover condition and whose capital is itself held for at least 75 percent by individuals. A French subsidiary wholly owned by your foreign holding company therefore needs careful analysis: if the foreign parent is itself held by individuals, the chain can still qualify, but if an ineligible corporate shareholder sits anywhere in the chain, the reduced rate may be lost. Ask your accountant to verify the shareholder chain in writing before claiming the 15 percent rate, because an unjustified claim becomes a reassessment later.

One warning about reading older English-language guides to French tax. For years, large companies paid an additional social contribution of 3.3 percent on top of the IS above a certain threshold. That surcharge regime has been repeatedly amended and its provisions are currently shown on Légifrance with a deferred-repeal status, which means the applicable version depends on the year concerned. Do not apply a remembered percentage from an old blog post. For any year in which your company’s IS exceeds the thresholds discussed in the press, ask your accountant to confirm the exact additional contributions due for that year on the basis of the version of the Code in force for that year.

B. How does your company actually pay: four instalments, a final balance, a return, and local business taxes?

French corporate tax is a pay-as-you-earn system. Your company does not wait until the accounts are closed to pay. Article 1668 of the Code général des impôts states that “L’impôt sur les sociétés donne lieu au versement, au comptable public compétent, d’acomptes trimestriels déterminés à partir des résultats du dernier exercice clos”, which means corporate tax gives rise to the payment, to the competent public accountant, of quarterly instalments computed on the basis of the results of the last closed financial year. The same article fixes the calendar in equally direct terms: “Les paiements doivent être effectués au plus tard les 15 mars, 15 juin, 15 septembre et 15 décembre de chaque année”, meaning payments must be made no later than 15 March, 15 June, 15 September and 15 December of each year. Each instalment is, as a rule, one quarter of the tax computed on the last known results, and the administration collects the money through the SIE, the service des impôts des entreprises, the local corporate tax office with which your company files and pays. The provision is published on Article 1668 of the Code général des impôts on Légifrance.

Three practical consequences follow for a founder managing from abroad. First, a newly formed company is spared instalments during its very first year. Article 1668 exempts newly created companies, and companies newly subject to corporate tax by operation of law or by option, from paying instalments during their first year of activity. The whole first-year tax is therefore paid with the final balance, which helps cash flow but requires discipline, because a full year of tax falls due at once. Second, once the year is closed and the real profit is known, the company performs a final computation, called the liquidation, on the basis of the filed return, and any remaining amount is paid when the balance statement (relevé de solde) is filed. The Code requires any additional tax shown by the final computation to be paid when the balance statement is filed, no later than the 15th day of the fourth month following the end of the financial year. For a company closing on 31 December, the balance is therefore due by 15 April. If, on the contrary, the instalments turn out to exceed the tax finally due, the excess, after setting it against other direct taxes owed by the company, is refunded within thirty days of filing the balance statement. Third, the law offers a safety valve when the year turns out worse than the previous one. Article 1668 allows a company that considers the instalments already paid for a year equal to or greater than the total corporate tax it will owe for that year, before tax credits, to skip the remaining instalment payments. But this modulation is a precise legal mechanism, not a rough guess, and the administrative courts apply it strictly, as the second part of this article shows.

Alongside the instalments, your company must file its annual corporate return. Article 223 of the Code provides that “Toutefois, la déclaration du bénéfice ou du déficit est faite dans les trois mois de la clôture de l’exercice. Si l’exercice est clos le 31 décembre ou si aucun exercice n’est clos au cours d’une année, la déclaration est à déposer au plus tard le deuxième jour ouvré suivant le 1er mai”, which means the declaration of profit or loss is made within three months of the end of the financial year, and if the year ends on 31 December, or if no year is closed during a calendar year, the return must be filed no later than the second working day following 1 May. In practice, your French accountant prepares the liasse fiscale, the bundle of tax forms and financial statements, and files it electronically, together with the minutes and extracts of the shareholders’ decisions approving the accounts. Missing this deadline exposes the company to late-filing penalties calculated on the tax due, and it also delays the final computation on which the balance depends. The text is available on Article 223 of the Code général des impôts on Légifrance. From abroad, the single most useful habit is to impose on your accountant a hard internal deadline at least three weeks before the legal date, because gathering signatures and powers from a non-resident director always takes longer than expected, and the French administration grants no extra time for distance.

Finally, corporate tax is not the only tax your French company pays. Every company that habitually carries on a non-salaried professional activity owes the cotisation foncière des entreprises, known as the CFE, a local business tax assessed each year, in principle at the address of each establishment. Article 1447 of the Code states that “La cotisation foncière des entreprises est due chaque année par les personnes physiques ou morales”, followed by the entities concerned, “qui exercent à titre habituel une activité professionnelle non salariée”, meaning the CFE is due each year by individuals and legal persons that habitually carry on a non-salaried professional activity. The provision is published on Article 1447 of the Code général des impôts on Légifrance. Even a company with no profit, and even in its first years, generally receives a CFE bill from the municipality where its registered office or premises sit, subject to a first-year exemption that your accountant should verify. Above the CFE sits a second layer, the cotisation sur la valeur ajoutée des entreprises, known as the CVAE, a tax on the value added produced by the business. Article 1586 ter of the Code provides that “Les personnes physiques ou morales”, with the other entities listed, “dont le chiffre d’affaires est supérieur à 152 500 € sont soumises à la cotisation sur la valeur ajoutée des entreprises”, meaning businesses whose turnover exceeds 152,500 euros are subject to the CVAE. The text is on Article 1586 ter of the Code général des impôts on Légifrance. A clear warning is needed here: both provisions currently appear on Légifrance with a deferred-repeal flag, because Parliament has repeatedly rescheduled the phase-out of the CVAE and the reform of local business taxation. The existence of the taxes and their thresholds are settled, but the rates and the phase-out timetable in force for a given year must be checked against the version of the Code applicable to that year, and any English summary found online should be treated with suspicion until your accountant confirms it. Together, the CFE and the CVAE form the contribution économique territoriale, the CET, the French local business tax bundle, and they are billed and challenged separately from the IS, before different offices and under different deadlines.

II. When the bill goes wrong: tax losses, late instalments and how to challenge from abroad

A. Your company loses money or pivots: can it carry its losses forward and back without losing them?

Losses are where foreign founders most often destroy value without realising it. French law is generous in principle: a loss suffered in one year is treated as a charge of the following year and set against that year’s profit. Article 209 treats a loss suffered in one year as a charge of the following year, deducted from that year\u2019s profit up to 1 million euros plus 50 percent of the taxable profit above that amount. Any unused remainder is carried forward on the same terms to subsequent years. In practice, a company that loses 3 million euros in year one and earns 2.4 million in year two can shelter 1 million plus half of the 1.4 million above the threshold, namely 1.7 million, and carries the rest forward indefinitely, because French carryforward, unlike the systems of several neighbouring countries, has no time limit. The trade-off for this unlimited duration is the annual cap, which slows down the use of very large losses, and one absolute trap: the company must still be, legally speaking, the same business.

That trap is the cessation d’entreprise, the termination of the business for tax purposes. Article 221 of the Code provides, in a sentence every founder should memorise, that “Le changement de l’objet social ou de l’activité réelle d’une société emporte cessation d’entreprise”, meaning a change in the corporate purpose or in the real activity of a company entails termination of the business. Termination wipes out the right to carry losses forward: the losses born in the old business cannot be set against the profits of what the law regards as a new one. The provision is published on Article 221 of the Code général des impôts on Légifrance. The danger is concrete for startups supervised from abroad, because pivots are frequent: a company formed to run shops that becomes a pure holding company, or a building-materials trader that reinvents itself as a property consultant, may cross the line without any formal winding-up.

The Conseil d’État, the supreme court for tax disputes, has set the test in a decision founders should know. On 26 July 2018, in case number 404078 concerning the company Group’Fade, the court held that “la mise en oeuvre du droit au report déficitaire est subordonnée notamment à la condition qu’une société n’ait pas subi, dans son activité, des transformations telles qu’elle n’est plus, en réalité, la même”, which means implementing the right to carry losses forward is subject in particular to the condition that the company has not undergone, in its activity, changes of such a nature that it is no longer, in reality, the same company. The facts illustrate the comparison the judges make. The company had traded in clothing since 1975, built up six subsidiaries from 2003, closed its last directly operated shop in 2008 and devoted itself exclusively to its holding activity from then on. The court of appeal had treated this as a termination by looking back at the activity since the company’s creation in 1975, and the Conseil d’État annulled that reasoning as an error of law, because the loss had arisen in the year closed in 2008, a year in which the holding activity, the only one continued in 2009, already represented a non-marginal share of total activity. Deciding the case itself, the court found that the company “n’avait pas subi dans son activité, entre les exercices clos en 2008 et en 2009, de transformations telles qu’elle n’était plus, en réalité, la même”, meaning it had not undergone, in its activity between the years closed in 2008 and 2009, changes of such a nature that it was no longer, in reality, the same company, and it allowed the loss to be carried forward to 2009. The lesson for a foreign shareholder is precise: the comparison is made between the year the loss arose and the year it is used, not against the company’s distant origins, and a gradual, documented evolution preserves the losses while an abrupt reinvention destroys them. The full decision is published on Conseil d’État, 26 July 2018, No. 404078 on Légifrance.

The mirror mechanism, the carryback, allows a loss to be set against the previous year’s profit instead of future profits, but it is optional and strictly fenced. Article 220 quinquies of the Code provides that “le déficit constaté au titre d’un exercice ouvert à compter du 1er janvier 1984 par une entreprise soumise à l’impôt sur les sociétés peut, sur option, être considéré comme une charge déductible du bénéfice de l’exercice précédent”, meaning a loss recorded for a year by a company subject to corporate tax may, by option, be treated as a deductible charge against the previous year’s profit, and that “L’excédent d’impôt sur les sociétés résultant de l’application du premier alinéa fait naître au profit de l’entreprise une créance non imposable d’égal montant”, meaning the excess corporate tax resulting from this mechanism creates, for the company, a non-taxable claim against the Treasury for the same amount. That claim can be used to pay later IS or refunded after a waiting period, which makes the carryback a genuine cash instrument for a company that has just turned loss-making. The text is on Article 220 quinquies of the Code général des impôts on Légifrance. But the option is closed in troubled years: it cannot be exercised for a year in which a total transfer or termination of the business, a merger or similar transaction, or a court order placing the company in judicial liquidation occurs.

A very recent decision shows how unforgiving the same-business condition is for the carryback. On 23 December 2025, in case number 500342 concerning the company Immofaq, the Conseil d’État held that “l’option en faveur du report en arrière du déficit d’un exercice sur le résultat de l’exercice précédent n’est ouverte qu’à la condition que la société contribuable puisse être regardée, lors de l’exercice au titre duquel elle a constaté un déficit, comme la même entreprise que celle ayant réalisé un bénéfice lors de l’exercice précédent et ayant été imposée à ce titre”, which means the option to carry a year’s loss back against the previous year’s result is open only on condition that the taxpayer company can be regarded, in the year in which it recorded the loss, as the same business as the one that earned a profit in the previous year and was taxed on it. The court added that “une telle option n’est pas ouverte lorsque la société a, au cours de l’un des deux exercices en cause, modifié son activité réelle de telle sorte qu’elle n’est plus, en réalité, la même entreprise”, meaning the option is not open where the company has, in either of the two years concerned, changed its real activity in such a way that it is no longer, in reality, the same business. In that case, the company had sold its building-materials business at the end of 2012, changed its name and corporate purpose to become a consultancy, then tried to carry its 2013 loss back against its 2012 profit, and the court rejected the claim. For a founder directing a pivot from abroad, the sequence matters enormously: change the registered corporate purpose and the real activity in the loss year, and both the carryforward and the carryback can collapse at once. The decision is published on Conseil d’État, 23 December 2025, No. 500342 on Légifrance. Before any pivot, have your lawyer compare the activity of the loss year with the activity of the year of use, keep board minutes explaining the continuity, and never change the corporate purpose in the same resolution as the loss-making restructuring without advice.

B. You paid late, you paid too little, or the assessment is wrong: what does it cost and how do you fight it from abroad?

Instalment discipline is enforced with unusual severity. The modulation mechanism of Article 1668 looks flexible, but the courts read its conditions literally. In a judgment of 21 December 2018, case number 18MA00667 concerning the company Promocom, the Marseille administrative court of appeal recalled the mechanics: “les résultats servant de base au calcul des acomptes sont ceux réalisés au titre de l’exercice ou de la période d’imposition précédant celui au titre duquel les acomptes sont dus”, meaning the results used to compute the instalments are those of the year or tax period preceding the one for which the instalments are due, with a provisional computation followed by regularisation at the next instalment. In that case, the company, liable for over one million euros of IS for 2011, had paid only 799,369 euros by the second deadline of 15 June 2011, leaving a shortfall of 215,827 euros against the 1,015,196 euros due for the first two instalments. The court found that “la SARL Promocom n’entrait pas dans les prévisions du 4 bis de l’article 1668 du code général des impôts dès lors qu’après versement de l’acompte du 15 juin 2011, elle ne s’était pas acquittée de la totalité de la cotisation d’impôt sur les sociétés dont elle était redevable”, meaning the company did not fall within the modulation provision since, even after paying the June instalment, it had not discharged the full corporate tax liability for the year, and it upheld the penalties even though the company had eventually paid the whole year’s tax through its four instalments. The judgment is published on Cour administrative d’appel de Marseille, 21 December 2018, No. 18MA00667 on Légifrance.

The penalties themselves are mechanical. Article 1731 of the Code provides that “Donne lieu à l’application d’une majoration de 5 % tout retard dans le paiement des sommes qui doivent être versées aux comptables de l’administration fiscale”, meaning any delay in paying sums due to the tax accountants triggers a 5 percent surcharge, and Article 1727 adds that “Toute créance de nature fiscale, dont l’établissement ou le recouvrement incombe aux administrations fiscales, qui n’a pas été acquittée dans le délai légal donne lieu au versement d’un intérêt de retard”, meaning any tax claim not paid by the legal deadline gives rise to late interest. The two stack: the 5 percent penalty punishes the delay, and interest accrues month by month until payment. Both provisions are on Article 1731 of the Code général des impôts on Légifrance and Article 1727 of the Code général des impôts on Légifrance, currently shown with a deferred-amendment flag because the late-payment regime is under legislative reform, so the version applicable to the year of the delay must be checked. For a founder abroad, the message is blunt: a short instalment is never harmless, even if the year-end balance is fully paid, and modulation must be used exactly as written, with the full remaining liability covered, or not at all. Set up SEPA direct debit (prélèvement SEPA) with the SIE and calendar alerts for the four dates, because a missed 15 June while you are travelling can cost 5 percent plus interest on the shortfall.

When the assessment itself is wrong, whether after an audit (vérification de comptabilité, the on-site inspection of your books, or examen de comptabilité, its remote equivalent) or on the face of a notice, the remedy starts with an administrative complaint, not with the court. The réclamation, the formal claim to the tax administration, must be filed within a strict deadline. Article R*196-1 of the Tax Procedure Book (Livre des procédures fiscales, known as the LPF) provides that “Pour être recevables, les réclamations relatives aux impôts autres que les impôts directs locaux et les taxes annexes à ces impôts, doivent être présentées à l’administration au plus tard le 31 décembre de la deuxième année suivant celle”, followed by the triggering events, which means claims concerning taxes other than local direct taxes must reach the administration no later than 31 December of the second year following the year of the collection notice, of payment where no notice exists, or of the event giving rise to the claim. A 2024 IS assessment notified in 2025 can therefore generally be challenged until 31 December 2027, but each notice carries its own clock, and interest and penalties attached to the same tax follow the same claim. The provision is on Article R*196-1 of the Livre des procédures fiscales on Légifrance. The claim must state the facts, the legal grounds and the amount sought, attach the supporting documents, and be sent to the SIE that issued the assessment, with proof of dispatch kept carefully when posting from abroad.

If the administration rejects the claim expressly or stays silent for six months, the dispute moves to the administrative court. Article R*199-1 of the LPF states that “L’action doit être introduite devant le tribunal compétent dans le délai de deux mois à partir du jour de la réception de l’avis par lequel l’administration notifie au contribuable la décision prise sur la réclamation”, meaning proceedings must be brought before the competent court within two months of receipt of the notice by which the administration communicates its decision on the claim, and that a taxpayer who has received no decision within six months “peut saisir le tribunal dès l’expiration de ce délai”, meaning he may seise the court as soon as that period expires. The text is on Article R*199-1 of the Livre des procédures fiscales on Légifrance. For a company whose registered office is in Paris, the competent court is the Paris administrative court (tribunal administratif de Paris), with appeal to the Paris administrative court of appeal (cour administrative d’appel de Paris); companies in the inner suburbs generally fall under the Montreuil court. In practice, a founder living abroad conducts the whole written phase through a French lawyer and accountant: the réclamation by secure electronic filing or registered letter, then the court application (requête) through the Télérecours platform, with a French address for service, because court papers are not served abroad with the same reliability. Keep every assessment, every proof of payment of the instalments, and every exchange with the SIE, since the Promocom case shows that instalment disputes are won or lost on dated figures, and limitation arguments on the exact date of the notice or payment.

Conclusion

French corporate tax rewards the organised foreign founder and punishes the distracted one. Your SAS or SARL is liable on all profits earned through its French operations at 25 percent, with 15 percent on the first 42,500 euros when turnover and shareholder conditions are met. The tax is paid in four instalments on 15 March, 15 June, 15 September and 15 December by reference to the last closed year, with the balance due by the 15th of the fourth month after closing and the return filed within three months of closing, or by the second working day after 1 May for calendar-year companies. Losses carry forward indefinitely within the annual cap of 1 million euros plus half the excess, and can be carried back by option into a Treasury claim, but both mechanisms die if the company changes its real activity so much that it is no longer the same business, as the Conseil d’État confirmed in 2018 for carryforward and again in December 2025 for carryback. Instalment shortfalls attract a 5 percent surcharge plus monthly interest even when the year’s total is eventually paid, while a wrong assessment is fought first by a claim to the tax office before 31 December of the second following year, then before the administrative court within two months. Run the calendar from abroad with direct debits, early internal deadlines and written confirmation of every rate and option, and the French system becomes predictable. Let the dates slip or pivot the business without advice, and the losses, the modulation and the remedies slip away with them.