You have just received the Kbis for your French company — the official registration certificate issued through the commercial court registry, known in France as the greffe — and the bank account is finally open. The next question from every foreign founder arrives within days: how much French corporate tax will this company actually pay, when must the money leave the account, and what happens if you get a date or a figure wrong while running the business from London, New York, Dubai or Singapore? This guide answers those three questions in order, with the exact legal texts and court decisions behind each answer.

France taxes the profits of your French company through the impôt sur les sociétés, universally shortened to IS. The rules sit in the Code général des impôts, the French tax code, usually shortened to CGI. Your day-to-day contact is the SIE, the service des impôts des entreprises, which is the local corporate tax office attached to the area of your registered office, and above it the DGFIP, the Direction générale des finances publiques, the national tax administration. Every French acronym used below is explained the first time it appears, so you can forward this article to a co-founder or a lender and everyone stays on the same page.

Part I explains which profits France taxes, at what rate, and how quarterly instalments and the final balance work when the finance team sits abroad. Part II explains how to carry a loss forward, correct a return, and survive late filing, late payment and a tax audit, including the exact procedure for contesting a reassessment. A short Paris and Île-de-France section is integrated into each part, because the competent office, the court and the practical delays depend on where your siège social, your registered office, is located.

I. How much corporate tax will your French company pay and when must you pay it?

A. Which profits France taxes and at what 25 percent rate

Once your company is registered, the starting point is simple. Article 206 of the tax code provides that, subject to narrow exceptions, the following “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 n’ayant pas opté pour le régime fiscal des sociétés de personnes”, together with cooperatives and other legal entities carrying on profit-making operations: Article 206 of the Code général des impôts — companies liable to corporate tax. In plain terms, a SAS, the société par actions simplifiée, the flexible joint-stock company almost every foreign founder chooses, and a SARL, the société à responsabilité limitée, the quota-based limited liability company, both fall inside corporate tax by default from day one. You do not need a minimum turnover or a first profit for the regime to apply; the liability exists as soon as the company exists.

The taxable base is then defined by Article 38 of the same code: “Sous réserve des dispositions des articles 33 ter , 40 à 43 bis et 151 sexies , le bénéfice imposable est le bénéfice net, déterminé d’après les résultats d’ensemble des opérations de toute nature effectuées par les entreprises, y compris notamment les cessions d’éléments quelconques de l’actif, soit en cours, soit en fin d’exploitation”: Article 38 of the Code général des impôts — definition of taxable profit. Every type of transaction counts, including sales of assets during the year or when the business stops. For a foreign shareholder this has a practical consequence that surprises many newcomers: selling equipment, assigning a lease right, or transferring shares held as assets can all feed the taxable result, not only the trading margin shown in management accounts.

The rate is set by Article 219: “Le taux normal de l’impôt est fixé à 25 %”: Article 219 of the Code général des impôts — 25 percent standard corporate tax rate. Budget 25 percent of the taxable profit as your baseline. Reduced rates exist for specific long-term gains and for certain innovation income, but a foreign founder should never assume they apply without a file-by-file analysis; the standard rate is the only safe planning assumption at entry stage.

France does not tax worldwide profit. Article 209 provides that only profits from enterprises operated in France are taken into account, alongside certain listed French-source income and profits attributed to France by a double-tax treaty: Article 209 of the Code général des impôts — territoriality and loss carry-forward. If your group keeps a UK parent, a US LLC or a Dubai holding above the French company, each entity is taxed where it operates, and the treaty between France and that state decides the borderline cases such as dividends, interest and royalties. That territorial logic is also why the choice between a subsidiary and a branch matters so much: a subsidiary is a separate French person for tax purposes, while a branch, called a succursale, is only an extension of the foreign company and raises permanent-establishment questions from the first invoice. If you have not yet chosen your vehicle, read our pillar guide first: Setting up a company in France as a foreign founder: bank account, Kbis, VAT and first hire.

Deducting costs is where foreign-owned companies most often lose money in audits. The Conseil d’État, the highest administrative court, recalls the two-step rule that every founder with intragroup invoices must understand: “En vertu des dispositions combinées des articles 38 et 209 du code général des impôts, le bénéfice imposable à l’impôt sur les sociétés est celui qui provient des opérations de toute nature faites par l’entreprise, à l’exception de celles qui, en raison de leur objet ou de leurs modalités, sont étrangères à une gestion normale. Constitue un acte anormal de gestion l’acte par lequel une entreprise décide de s’appauvrir à des fins étrangères à son intérêt”: Conseil d’État, 26 April 2024, no. 458958, Kyowa — abnormal management and deductible charges. An acte anormal de gestion, an abnormal management act, is any decision by which the company impoverishes itself for purposes foreign to its own interest. The same decision places the first burden on the company: “Il appartient au contribuable, pour l’application des dispositions de l’article 39 du code général des impôts, de justifier tant du montant des charges qu’il entend déduire du bénéfice net défini à l’article 38 du code général des impôts que de la correction de leur inscription en comptabilité, c’est-à-dire du principe même de leur déductibilité.” You must therefore prove the amount of each charge, its correct booking, and the reality and value of what the company received in return, before the administration has to prove anything.

That burden bites hardest on cross-border charges. Article 57 of the tax code targets profits indirectly transferred abroad through inflated or understated purchase or sale prices, or by any other means, between companies under common dependence or control: “Pour l’établissement de l’impôt sur le revenu dû par les entreprises qui sont sous la dépendance ou qui possèdent le contrôle d’entreprises situées hors de France, les bénéfices indirectement transférés à ces dernières, soit par voie de majoration ou de diminution des prix d’achat ou de vente, soit par tout autre moyen, sont incorporés aux résultats accusés par les comptabilités”: Article 57 of the Code général des impôts — indirect transfers of profits abroad. Management fees invoiced by the foreign parent, a seconded president rebilled at cost-plus, or a group loan at an unusual rate all sit in this danger zone. The Kyowa case itself concerned a Japanese parent seconding employees to chair its French subsidiary and rebilling their pay: the court accepted the deduction only because the seconded staff had worked exclusively for the French company, had actually run it, and the amounts were not excessive. Keep contemporaneous proof — contract, time records, invoices, evidence of services actually received — or the charge is reintegrated and taxed at 25 percent plus penalties.

A second decision shows the mirror image. A consultancy that routed funds through its manager’s personal brokerage account for high-risk contracts for difference, then booked the transfers as company charges, lost its deduction because it could not prove the company had kept ownership of the funds or acted through a mandate, and its books did not faithfully record the flows. The court recalled that “il résulte de l’article 39 du code général des impôts, dont les dispositions sont applicables à l’impôt sur les sociétés en vertu de l’article 209 du même code, que le bénéfice net est établi sous déduction de toutes charges”, but only charges that are genuinely the company’s, properly documented and properly booked: Conseil d’État, 24 July 2019, no. 418330, Patrimmo Conseils — burden of proof for deductible charges. For a founder abroad, the lesson is concrete: never mix personal and company money, never run company trades through a personal account, and make the French books reflect every movement exactly.

B. How quarterly instalments and the final balance work when you run the company from abroad

French corporate tax is not paid once a year. Article 1668 of the tax code provides: “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”: Article 1668 of the Code général des impôts — quarterly corporate tax instalments. Four acomptes, quarterly instalments, are computed from the last closed financial year and paid to the competent public accountant during the current year, with the first instalments falling early in the calendar year — the statute fixes the first payment dates on 15 March and 15 June, followed by two further quarterly payments. Each instalment is a fraction of the tax computed on the prior year’s results, so a profitable year automatically raises next year’s cash rhythm even before the current result is known.

There is one welcome exception for newcomers. The same article 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 au cours de leur premier exercice d’activité ou de leur première période d’imposition arrêtée conformément au deuxième alinéa du I de l’article 209 .” (Article 1668 of the Code général des impôts — first-year instalment exemption) Your first financial year therefore runs without instalments; the full tax for that year is settled as a balance once the result is known. From the second year on, the quarterly rhythm applies, and founders who had a strong first year must provision cash from January even though the return is filed months later.

The return itself follows Article 223: “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”: Article 223 of the Code général des impôts — corporate tax return deadline. For the classic 31 December year-end, the liasse fiscale, the full tax return bundle including financial statements and annexes, must therefore be filed at the very start of May, and it must list the amounts the company asks to set against its liability. The balance of tax, the solde, follows the return: instalments already paid are credited and the remainder is due shortly after filing. Miss the return and you miss the balance — which is exactly how the filing penalties described in Part II are triggered.

Everything is done online, and that is good news for a director abroad. Returns are filed electronically and payments are made by bank transfer through the company’s Espace professionnel, the professional account on the tax administration’s website, or through the EDI-TDFC channel used by your expert-comptable, the French chartered accountant. A SEPA transfer from a French business account works; a transfer ordered from a foreign account of the company is accepted as long as it reaches the right accountant’s office with the right references, so keep the SIE payment references exactly as issued. Give your accountant a mandate and a calendar alert for each quarterly date, because the French system sends few reminders and excuses no delay for the excuse that the director was travelling.

Paris and Île-de-France practice adds three concrete points. First, the competent SIE is determined by the siège social: a company registered in Paris pays to the Paris SIE network, while one in Hauts-de-Seine, Seine-Saint-Denis or Val-de-Marne pays to the SIE of its département, all coordinated by the regional directorate. Choose the registered address with this in mind, because moving the siège later means changing tax office mid-year. Second, Paris accountants close dozens of foreign-owned files in the same April week, so instruct your expert-comptable in February, not in April, and deliver English-language source documents with a French summary to avoid booking errors. Third, if the company has Paris commercial premises, the same calendar brings parallel local deadlines handled by different offices; keep corporate tax, VAT and local business levies on one consolidated calendar rather than three separate ones.

II. How do you carry losses, fix errors and survive penalties or a tax audit?

A. How to carry a French loss forward and correct a return without panic

A loss-making first year is normal for a market-entry subsidiary, and French law treats the deficit as an asset rather than a dead end. Article 209 provides: “Sous réserve de l’option prévue à l’article 220 quinquies , en cas de déficit subi pendant un exercice, 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. Si ce bénéfice n’est pas suffisant pour que la déduction puisse être intégralement opérée, l’excédent du déficit est reporté dans les mêmes conditions sur les exercices suivants”: Article 209 of the Code général des impôts — indefinite carry-forward of losses. Concretely, next year’s profit absorbs last year’s loss up to one million euros in full, plus half of any profit above that million, and whatever cannot be absorbed is carried forward again on the same terms, year after year, with no time limit. A French subsidiary that loses 800,000 euros in year one and earns 500,000 euros in year two therefore pays tax on nothing in year two, and keeps the remaining shelter for later. Track the stock of carry-forward losses in every return, because a forgotten line in the liasse is a forgotten asset.

Losses also change behaviour in groups. A profitable French sister company cannot automatically use another company’s loss outside a formal tax-consolidation regime, and transferring losses through artificial invoicing falls straight back under Article 57 on indirect transfers and the abnormal-management case law of Part I. If the parent must fund the loss-making subsidiary, a documented capital increase or a written shareholder loan with arm’s-length interest, actually paid and properly booked, survives audits far better than vague year-end management fees designed to move the loss where the group prefers. The Patrimmo lesson applies again: the company must show the funds stayed the company’s, the mandate existed, and the books recorded each movement faithfully.

When the return itself contains an error, correct it before the administration finds it. A company that understated profit or overstated a charge may file a déclaration rectificative, a corrective return, replacing the figures for the year concerned; the correction generates either an additional payment or a repayment claim, and it almost always costs less than the same correction imposed after an audit. Keep every supporting document — supplier invoices, bank statements, loan agreements, transfer-pricing memo, board minutes approving the accounts — for the full retention period, because the auditor will ask for the paper behind each material line, and the Kyowa burden of proof means the company speaks first with documents, not with explanations.

Founders abroad should build a simple yearly routine. Approve the annual accounts within six months of year-end at a shareholders’ decision that can be signed remotely if the articles allow it. File the liasse at the start of May for a December year-end. Reconcile the four instalments against the final liability and diary the refund or the balance. Update the loss schedule. And keep a single bilingual file — contract, invoice, proof of payment, proof of service — behind every intragroup charge above a materiality threshold your accountant sets. Paris-based accountants for foreign groups run exactly this checklist each spring; ask yours to confirm in writing that each step is done, because an email trail is itself evidence of diligent management if a penalty is later discussed.

B. What late filing and late payment really cost and how to contest a reassessment from abroad

Missing the return deadline is the most expensive clerical error in this guide. Article 1728 of the tax code states: “Le défaut de production dans les délais prescrits d’une déclaration ou d’un acte comportant l’indication d’éléments à retenir pour l’assiette ou la liquidation de l’impôt entraîne l’application, sur le montant des droits mis à la charge du contribuable ou résultant de la déclaration ou de l’acte déposé tardivement, d’une majoration de : a. 10 % en l’absence de mise en demeure ou en cas de dépôt de la déclaration ou de l’acte dans les trente jours suivant la réception d’une mise en demeure d’avoir à le produire dans ce délai ; b. 40 % lorsque la déclaration ou l’acte n’a pas été déposé dans les trente jours suivant la réception d’une mise en demeure d’avoir à le produire dans ce délai ; c. 80 % en cas de découverte d’une activité occulte”: Article 1728 of the Code général des impôts — surcharges for late or missing returns. File late on your own initiative and 10 percent is added to the tax due. Ignore the formal demand letter, the mise en demeure, for more than thirty days and the surcharge jumps to 40 percent. Run a hidden activity and it reaches 80 percent. These surcharges apply to the duties themselves, so on a 100,000-euro liability a spontaneous late return costs an extra 10,000 euros before any further sanction — a margin no market-entry budget should absorb.

Late payment of amounts already assessed follows its own surcharge track, and the same discipline applies: diary every due date, pay by transfer with exact references, and never net off a disputed amount against an undisputed one without advice. If cash is short, ask the SIE for a payment plan before the deadline rather than defaulting silently; a reasoned request with accounts and a timetable preserves goodwill and, in practice, keeps the file out of the penalty track while it is examined. Silence, by contrast, is read as neglect and priced accordingly.

When the administration disagrees with your return, the procedure is heavily formalised, and that formalism protects a foreign company that answers properly. The standard route is a vérification de comptabilité, an on-site or desk audit of the accounts, ending, where adjustments are proposed, in a proposition de rectification, a reasoned proposed reassessment. Article L. 57 of the Livre des procédures fiscales, the procedural tax code, provides: “L’administration adresse au contribuable une proposition de rectification qui doit être motivée de manière à lui permettre de formuler ses observations ou de faire connaître son acceptation. Sur demande du contribuable reçue par l’administration avant l’expiration du délai mentionné à l’article L. 11 , ce délai est prorogé de trente jours”: Article L. 57 of the Livre des procédures fiscales — reasoned proposed reassessment and extended reply time. You therefore receive a motivated letter, you have a statutory period to reply with observations or acceptance, and you can obtain a thirty-day extension simply by asking before the first deadline expires. Use that extension every time: it buys the weeks needed to gather English-language evidence, have it summarised in French, and let your accountant and lawyer align the technical and legal lines.

Answering well means answering like the Kyowa winner, not like the Patrimmo loser. Produce the contract behind each disputed charge, the invoice, the proof of payment from the company account, and the proof that the service was actually rendered to the French company — meeting notes, deliverables, time sheets, access logs. Explain the price method for intragroup services in one page: cost base, margin, comparables or group policy reference. Show the bookkeeping entries and their dates. Where the administration asserts an abnormal management act or an Article 57 transfer, force the debate onto facts the file supports: exclusive work for the French company, real direction exercised, amounts consistent with the service. General statements about group synergies do not move an auditor; dated deliverables do.

If the reassessment is maintained, the remedies run in stages and each stage has its own clock. File a réclamation, an administrative claim, to the tax office, then, on express or implied rejection, appeal to the tribunal administratif, the administrative court of the area of the registered office — for a Paris siège, the Paris administrative court; elsewhere in the region, the court of the département concerned. Further appeal lies to the cour administrative d’appel and, on points of law, to the Conseil d’État, whose decisions quoted in this guide show how strictly the burden of documentary proof is applied. Never let a deadline pass while negotiating informally: lodge the protective claim or appeal first, then continue talking. And never invent a document to plug a gap; a missing proof loses a charge, while a false proof loses the whole file and exposes the manager personally.

For Paris and Île-de-France companies, three practical notes close this part. First, audits of foreign-owned Paris companies are routinely handled in French by correspondence and portal messages, with short reply windows; appoint a Paris-based correspondant — accountant or lawyer — empowered to receive and diary every letter the week it arrives. Second, shareholder meetings, board minutes and powers of attorney signed abroad are accepted if the articles allow remote decisions, but signatures, dates and certified translations must be beyond reproach, because auditors test governance documents first when intragroup charges are at stake. Third, keep the BODACC, the Bulletin officiel des annonces civiles et commerciales, the official gazette publishing company registrations and insolvency notices, and the commercial court greffe filings consistent with the tax file: a registered office, manager or capital figure that differs between the Kbis extract and the tax return invites the very questions this guide teaches you to avoid.

Conclusion

French corporate tax for a foreign-owned company reduces to a short discipline. Article 206 puts your SAS or SARL inside the tax, Article 38 defines a broad profit base, and Article 219 taxes it at 25 percent on French-source operations identified with the help of Article 209 and your double-tax treaty. Article 1668 spreads payment across four quarterly instalments computed on last year’s result, with a first-year exemption for new companies, and Article 223 fixes the return — and therefore the balance — in the three months after year-end, at the start of May for a December close. Article 209 turns losses into a forward shelter capped at one million euros plus half the excess profit, renewable indefinitely. Article 1728 prices late filing at 10, 40 or 80 percent, and Article L. 57 guarantees a motivated reassessment proposal with an extendable reply period when the administration challenges your figures. Behind every charge, the Kyowa and Patrimmo decisions put the documentary burden on the company first. Master the calendar, document every intragroup euro, correct errors before the audit, and contest in time and in French with evidence — and the French tax system becomes predictable rather than frightening.