You live in London, New York, Dubai or Singapore and you own a French SAS (société par actions simplifiée, the flexible joint-stock company most foreign founders choose) or a SARL (société à responsabilité limitée, the closed limited-liability company). The company has its Kbis (the official registration certificate issued by the greffe, the clerk’s office of the commercial court), a French bank account, maybe one employee, and its first invoices. Then a letter from the SIE (service des impôts des entreprises, the local corporate tax office, acting for the DGFIP, the French tax administration) arrives: where is your corporate tax return, where are your advances, what is your balance? This guide explains French corporate income tax, called IS (impôt sur les sociétés), for a foreign owner who runs the business from abroad: what profits are taxed at the standard rate, when advances and the balance are due, how to file the return online, how losses can be carried forward or back, and what late filing or late payment costs. Every French acronym is explained, every key rule is tied to the Code général des impôts (CGI, the French Tax Code) and to official guidance from impots.gouv.fr and service-public.fr, so you can brief your accountant with precision and keep the company in good standing without flying to Paris.
French corporate tax is a tax on the company’s own profit, separate from your personal income tax and separate from VAT (value-added tax). A French company pays IS on profits earned through business carried on in France, files one annual tax return (the liasse fiscale, the bundle of financial statements and tax schedules), pays four advances during the year and a balancing payment after the year ends, and keeps supporting records for inspection. The standard rate is 25%, advances are calculated on the prior year’s tax, losses can shelter future or past profits within strict caps, groups can consolidate, dividends from qualifying subsidiaries are largely exempt, and late payment triggers interest plus surcharges. If you manage from abroad, the practical risks are missed deadlines, a return filed on the wrong dates, advances computed on the wrong base, losses forgotten, and a reassessment answered too late. The sections below walk through each point with the exact legal references your adviser needs.
For the choice of vehicle itself — SAS, SARL, branch or subsidiary — read our pillar guide on how to choose between a SAS, a SARL, a branch and a subsidiary when expanding into France from abroad, which this tax guide completes.
I. What your French company pays and when it pays it
A. Which profits of a foreign-owned French company pay corporate tax at 25%
French companies limited by shares are liable to IS by their very form. Article 206 of the CGI 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”, among other entities carrying on profit-making activity. Read the full text on article 206 of the Code général des impôts on Légifrance. In practice, your SAS pays IS unless it made a short-term option for partnership taxation, and your SARL pays IS unless a valid family or young-company option applies. A branch (succursale) of a foreign company registered in France is taxed on the profits attributable to the French establishment. Pure holding, service, trading or operating subsidiaries with their seat or effective management in France are taxed on profits earned through business carried on in France, plus certain listed categories of foreign-source income and profits attributed to France by a double-tax treaty, as set out in article 209 of the Code général des impôts on Légifrance, which frames territoriality and loss relief.
The standard rate is straightforward. Article 219 of the CGI states: “Le taux normal de l’impôt est fixé à 25 %.” See article 219 of the Code général des impôts on Légifrance. Taxable profit is rounded to the nearest euro. Reduced rates survive only in narrow cases: long-term capital gains on certain assets, young innovative companies, or specific property regimes described in the same article. Do not assume your operating margin qualifies for a reduced rate. Budget 25% of taxable profit, then adjust for the add-backs and deductions your accountant computes in the liasse fiscale: non-deductible fines, excess depreciation on luxury vehicles, non-deductible portions of interest under the interest-limitation rules, the research tax credit (CIR, crédit d’impôt recherche) if you do eligible research, and the participation-exemption described below.
Two regimes soften the 25% for groups and for dividends, and foreign founders with several French entities should know them early. First, dividends from qualifying subsidiaries can be almost fully exempt at the parent level. Article 216 of the CGI provides that “Les produits nets des participations, ouvrant droit à l’application du régime des sociétés mères et visées à l’article 145, touchés au cours d’un exercice par une société mère, peuvent être retranchés du bénéfice net total de celle-ci, défalcation faite d’une quote-part de frais et charges.” See article 216 of the Code général des impôts on Légifrance. The exempt amount is reduced by a 5% add-back for costs (1% inside a tax group), so a 100,000 euro dividend costs tax on 5,000 euros, meaning 1,250 euros of IS at 25%. The conditions — 5% holding, two-year retention, qualifying shares — are strict, and your accountant checks them before you strip the dividend from taxable profit. Second, a French parent holding at least 95% of French subsidiaries can form a tax-consolidated group. Article 223 A of the CGI allows a qualifying parent company to become solely liable for corporate tax on the combined results of a group formed with subsidiaries held at 95% or more continuously during the financial year. See article 223 A of the Code général des impôts on Légifrance. The parent files one group return and offsets profits of one company against losses of another, which matters when your French holding owns an operating subsidiary that is still loss-making while a sister service company is profitable.
Territoriality decides what a foreign founder must declare. A SAS registered in France with its siège social (registered office) in Paris is fully liable even if the shareholder lives abroad and board calls happen on video. Profits of a French permanent establishment of your foreign company are taxable in France even if invoices are issued from headquarters. Conversely, profits earned exclusively abroad through a genuinely separate foreign branch are generally outside French IS, subject to treaty attribution rules. Exchange-control and transfer-pricing rules then police the flows between your French company and its foreign parent: management fees, royalties, interest on shareholder loans and cost recharges must be at arm’s length and documented, or the SIE can add them back during an audit. Your intercompany agreements, invoices and bank traces should be ready before the return is filed, not reconstructed after the audit notice.
A short numerical example helps. Your SAS closes its first full year with 200,000 euros of accounting profit. After tax adjustments — add back 4,000 euros of fines, deduct a 10,000 euro eligible research expense supplement, add the 5% cost share on 40,000 euros of exempt dividends (2,000 euros) — taxable profit is 196,000 euros. IS at 25% equals 49,000 euros, before imputable tax credits. That 49,000 euros is paid through advances during the year and a balance after year-end, declared in the annual return, and recorded in the BODACC (Bulletin officiel des annonces civiles et commerciales, the official gazette where company filings are publicised) only indirectly through the filed accounts at the greffe, not as a tax figure. Keep this arithmetic in mind when you set dividend policy: dividends are paid from after-tax profit, and distributing without enough distributable reserves creates an irregular dividend that the company can later reclaim.
B. How advances, the balance and payment dates work when you live abroad
IS is paid before it is finally computed. The system uses four acomptes (quarterly advances) plus a solde (balancing payment), all paid online to the SIE through your espace professionnel on impots.gouv.fr. Each advance is one quarter of the IS due on the prior year’s profit, paid on fixed dates — commonly 15 March, 15 June, 15 September and 15 December for a calendar-year company — with the balance due around the 15th day of the fourth month after year-end, once the return fixes the exact liability. The official calendar and the forms (relevé d’acompte 2571, déclaration de résultat 2065 with its schedules) are published by the DGFIP; the practical reference is the enterprise taxation section of impots.gouv.fr, the portal of the French tax administration and the business-tax pages of service-public.fr, the official French public-service portal. Mandate a French accountant or a tax representative with online payment rights, because a foreign bank transfer that arrives two days late still counts as late.
New companies get a short breathing space, then fall into the normal rhythm. A company in its first financial year generally pays no advances and settles the full IS as a balance after its first return. From the second year, advances are computed on the first year’s tax, even if the second year looks weaker. If you expect a sharp drop in profit, you can reduce or stop advances by filing a modulation request with a forecast return, but an unjustified reduction triggers a surcharge on the underpaid amount. Conversely, if profit jumps, advances based on a small prior year leave a large balance — lawful, but plan cash accordingly. Companies whose IS is modest may pay fewer advances or settle annually under thresholds set by regulation; your accountant confirms which schedule applies from the prior year’s figures.
The filing that fixes the balance is the annual return. Article 223 of the CGI provides: “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.” See article 223 of the Code général des impôts on Légifrance. For a 31 December year-end, that means early May. The return includes the 2065 form and the liasse fiscale schedules: balance sheet, profit and loss, fixed assets, provisions, deficits carried, and tax credits. Even a dormant company with zero revenue files. A company that closes on 30 June files within three months of that date. Missing the return does not cancel the tax; the SIE assesses by default (taxation d’office) and adds surcharges, which are far harder to contest than a filed figure.
Payment mechanics from abroad deserve a checklist. Open the espace professionnel early, register the French SIRET (the 14-digit establishment identifier issued by INSEE, the statistics office, through the INPI single window, the Guichet unique run by the INPI, the French intellectual-property and business-registration office) and the SIE code, authorise SEPA direct debit from a French or SEPA-zone account, and set calendar reminders in both Paris time and your home time zone. Keep proof of each advance (the dated 2571 receipt), reconcile advances against the final IS, and carry any overpayment forward or claim a refund rather than leaving it unallocated. If the bank blocks a debit because the mandate was signed abroad, fix the mandate before the next due date; repeated rejections can be treated as late payments with interest.
Late payment has a meter that starts immediately. Article 1727 of the CGI states: “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.” See article 1727 of the Code général des impôts on Légifrance. Interest accrues monthly on top of surcharges for late filing, late payment and, where the administration shows bad faith or fraud, heavier penalties. Interest keeps running while you argue, so pay the principal under protest and contest separately rather than withholding everything during a dispute.
II. How to file correctly, use losses and stay clear of penalties
A. Filing the return, carrying losses forward and back, and documenting from abroad
The annual return is where foreign founders win or lose. Prepare the liasse fiscale from French GAAP accounts (PCG, plan comptable général), not from your home-country management pack. Reconcile revenue to VAT returns (CA3 monthly or quarterly returns and the annual summary), reconcile payroll to the DSN (déclaration sociale nominative, the monthly payroll and social-data return sent to URSSAF, the social-security collection agency), and tie intercompany charges to signed agreements. Attach the schedules your situation requires: deficit tracking, tax-credit forms for CIR or family-credit schemes, participation-exemption detail, and group schedules if you elected consolidation. File online through the espace professionnel; paper filing is no longer the norm and misses the secure timestamp you need when you live abroad.
Losses are an asset if you track them. Article 209 of the CGI provides that “ce déficit est considéré comme une charge de l’exercice suivant et déduit du bénéfice réalisé pendant ledit exercice dans la limite d’un montant de 1 000 000 € majoré de 50 % du montant correspondant au bénéfice imposable dudit exercice excédant ce premier montant.” See article 209 of the Code général des impôts on Légifrance. In plain terms, a loss carried forward (report en avant) shelters the next profit up to 1 million euros in full, then 50% of profit above that threshold, with the unused balance carried to later years indefinitely. A company with 2.4 million euros of accumulated losses that earns 1.6 million euros this year deducts 1 million plus 50% of 600,000 (300,000), meaning 1.3 million deducted, 300,000 taxed, and 1.1 million of losses still available. The schedule must be maintained every year, even profitable ones, or the balance is challenged.
A loss can also be carried back (report en arrière, carry-back) onto the prior year’s undistributed profit, within a 1 million euro cap, on express option. Article 220 quinquies of the CGI 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, dans la limite de la fraction non distribuée de ce bénéfice”. See article 220 quinquies of the Code général des impôts on Légifrance. The carry-back creates a tax credit that can be used against future IS or refunded after a holding period, which helps a company that turned profitable then slipped. The option is exercised in the return of the loss year, with a specific form and deadline; miss the option and the loss can only go forward. Changes of control, mergers and restructurings can restrict or transfer loss balances, so get clearance before you sell shares or merge entities.
Documentation from abroad must be audit-ready. Keep the Kbis, articles of association, shareholder register, board minutes approving the accounts, the signed management report where required, bank statements showing advances and balance, VAT returns, DSN summaries, intercompany agreements with transfer-pricing benchmarks, loan agreements with interest-rate evidence, and dividend minutes with distributable-profit calculations. Store them in a French-accessible data room with a named contact who can respond to the SIE within the statutory time limits. The greffe filings (annual accounts deposited at the commercial-court registry) and the tax return must tell the same story; a profit shown to the bank that differs from the filed profit without explanation invites questions.
Small foreign-owned companies often ask about simplified regimes. Micro-enterprise and simplified income-tax regimes concern personal income tax or very small businesses, not a standard SAS or SARL at IS on real profits. Your SAS files under the real-profit regime (régime réel normal or simplifié depending on turnover), with full financial statements. The simplifié variant reduces schedules but not rigour. If turnover is below the thresholds, your accountant may elect the lighter schedule set, but advances, balance and loss rules remain. Do not confuse the accounting simplification with an exemption from filing.
B. Late returns, reassessments and practical defences for an owner outside France
Missing a deadline converts a routine year into an expensive one. A late return triggers a surcharge on the tax due plus the interest meter of article 1727, and persistent failure leads to default assessment where the SIE estimates your profit from available data — bank movements, VAT returns, prior years — usually less favourably than your own accounts. A late advance triggers its own surcharge, and stopping advances without a justified forecast is penalised if the final tax shows you underpaid by a wide margin. The cure is to file as soon as possible even late, pay the principal, and request leniency (modération) for penalties with reasons: first offence, foreign-owner organisation gap now fixed with a local accountant, immediate compliance. Penalty relief is discretionary, but a clean subsequent record supports it.
Reassessments follow a formal procedure you can answer from abroad. The SIE sends a proposition de rectification (adjustment notice) explaining each add-back, the legal basis and the amounts, with time to respond — generally 30 days, extended on request. You reply in French, point by point, with exhibits: contracts, invoices, bank proof, transfer-pricing analysis, case references. If the administration maintains the adjustment, it issues an avis de mise en recouvrement (collection notice); you then have deadlines to claim to the SIE (réclamation contentieuse) and, if rejected, to appeal to the tribunal administratif (administrative court). Pay under protest to stop interest where possible, note the protest on the payment, and calendar the claim deadline printed on the notice — missing it closes the door even if the merits are strong. Appoint a French address for service (your accountant or counsel) so notices sent while you travel are processed.
Common adjustments for foreign-owned companies are predictable and preventable. Management fees from the foreign parent without a signed agreement or time records are added back. Interest on a shareholder loan above the deductible rate or on excessive debt is partially disallowed. A dividend stripped under the parent-subsidiary regime without the 5% holding or the retention period is reinstated. VAT and payroll inconsistencies — revenue in the IS return below VAT-declared turnover, salaries in the accounts above DSN totals — trigger wider audits across taxes and URSSAF contributions. A transfer-pricing shortfall can draw both IS and withholding-tax adjustments on deemed distributions to the foreign parent. Each of these is cheaper to fix in the return than in a rectification reply.
Treaties and withholding complete the picture for the foreign owner. France’s double-tax treaties allocate taxing rights and cap withholding on dividends, interest and royalties paid by your French company to its foreign parent or to you personally. The French company withholds at the treaty rate on outbound dividends, files the withholding return, and the foreign recipient claims a credit at home. Dividends from the French company to a non-resident shareholder suffer French withholding (prélèvement) unless a treaty or the EU parent-subsidiary directive reduces it; interest and royalties have their own caps and documentation. Keep beneficial-ownership certificates, tax-residence certificates and the correct forms before paying, because reclaiming over-withheld tax takes months. Your French corporate tax position and your personal withholding position must be handled together, not as two isolated files.
Practical governance from abroad closes the loop. Approve the accounts within six months of year-end at an AGM (assemblée générale, the annual shareholder meeting) or by written consultation allowed by your articles, file the accounts at the greffe within the statutory month(s), and keep the tax return consistent with the approved accounts. Diarise the four advance dates, the return deadline, the balance date, the CFE (cotisation foncière des entreprises, the local business-premises tax) in autumn, and VAT dates if you are liable. Review the SIE online mailbox weekly — notices appear there first. And before any distribution, have your accountant certify distributable profit, withholding and the dividend minutes; our companion guides on dividends and shareholder loans detail those mechanics.
Conclusion
French corporate tax for a foreign-owned company comes down to a short discipline: confirm IS liability from the company’s form and French establishment, budget the 25% rate on properly adjusted profit, pay four advances on time through the online portal, file the 2065 return with a complete liasse fiscale within three months of year-end (early May for a December close), track losses forward within the 1 million euro plus 50% limit or carry them back on option, use the parent-subsidiary and group regimes only when every condition is met, and answer any adjustment notice in French with documents before the deadline. Run from abroad with a French accountant holding payment mandates, a shared deadline calendar, and a data room where every intercompany charge, loan and dividend is evidenced. That routine keeps the Kbis clean, the SIE quiet, and the profit available for lawful distribution when the time comes.