You formed your French company from London, New York or Dubai, the Kbis (the official company identity extract issued by the commercial court registry, the greffe) arrived in your inbox, and the first invoices are going out. Then your accountant writes a short email with an unfamiliar acronym: IS. The IS, or impôt sur les sociétés, is the French corporate income tax, and it works nothing like the systems most foreign founders know. You do not wait for the tax office to send you a bill. You calculate the tax yourself, you pay it in four advance instalments (acomptes) during the year, you file the balance (solde) the following spring, and every step happens online, in French, through the professional account of the DGFIP, the Direction générale des finances publiques, the French tax authority. Miss an instalment and interest starts running. File late and the return itself becomes a problem. This guide explains, for a founder who lives abroad, which profits France taxes, the single 25% rate that now applies, how losses can be carried forward, the exact calendar of payments, the forms behind them, and how to answer a reassessment without boarding a plane. Every French acronym is explained, every decisive rule is quoted from the statute or the case law, and the practical pages of the tax authority are linked so you can act this week.
I. How much French corporate income tax your company really owes
A. Which profits France actually taxes when you live abroad
French corporate income tax does not depend on where you live. It depends on what your company is and where it operates. The statute opens with a sentence worth reading twice: “Il est établi un impôt sur l’ensemble des bénéfices ou revenus réalisés par les sociétés et autres personnes morales désignées à l’article 206 . Cet impôt est désigné sous le nom d’impôt sur les sociétés.” In plain English, a tax is established on all profits earned by the companies listed in Article 206 of the CGI, the Code général des impôts, the French Tax Code, and that tax is called the corporate income tax. The next question is therefore which companies Article 206 catches, and the answer covers almost every vehicle a foreign founder uses: “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 public limited companies, partnerships limited by shares and private limited companies are liable whatever their business purpose. In practice, your SAS (société par actions simplifiée, the flexible joint-stock company most foreigners choose) and your SARL (société à responsabilité limitée, the closed private limited company) are both inside the scope by default. If you hesitated at the formation stage between these vehicles, our formation guide comparing the SAS, the SARL, the subsidiary and the branch remains the starting point: Entering France From Abroad: Should You Choose a SAS, a SARL, a Subsidiary or a Branch. Once the company exists and operates, the IS regime described here applies to it in full.
The second filter is territoriality, and it is the one foreign shareholders misunderstand most. France does not tax your worldwide group profit. It taxes the profit earned by the business operated in France. Article 209, I of the Tax Code states the rule in these terms: the taxable profit is determined “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France, de ceux mentionnés aux a, e, e bis et e ter du I de l’article 164 B ainsi que de ceux dont l’imposition est attribuée à la France par une convention internationale relative aux doubles impositions”, meaning only profits earned in businesses operated in France are taken into account, plus certain listed categories of French-source income and profits whose taxation is attributed to France by a double-tax treaty. Concretely, if your French SAS sells, invoices and delivers from France with staff or premises there, its full trading profit is French taxable profit even though you, the shareholder, live in another country and even though the customers pay from abroad. Conversely, the profits your separate foreign parent earns on its own foreign activity are not pulled into the French base simply because it owns the French company. Dividends the French company later distributes to you are a different tax event, governed by withholding rules explained in our dividends guide, not by the corporate income tax on the company’s own profit.
Treaties confirm this architecture rather than replacing it. When your home country has signed a double-tax convention with France, business profits are taxable in France only if your enterprise carries on business here through a stable establishment, and only the profits attributable to that establishment. The administrative court of appeal of Versailles recalled the mechanism in a 25 June 2019 decision concerning the Franco-German treaty, quoting first the domestic rule and then the treaty: the court reproduced Article 209, I and continued with Article 4 of the convention signed between France and Germany on 21 July 1959, under which “Les bénéfices d’une entreprise de l’un des Etats contractants ne sont imposables que dans cet Etat, à moins que l’entreprise n’effectue des opérations commerciales dans l’autre Etat par l’intermédiaire d’un établissement stable qui y est situé. Si l’entreprise effectue de telles opérations commerciales, l’impôt peut être perçu sur les bénéfices de l’entreprise dans l’autre Etat, mais uniquement dans la mesure où ces bénéfices peuvent être attribués audit établissement”, meaning the profits of an enterprise of one contracting State are taxable only in that State unless the enterprise carries on commercial operations in the other State through a stable establishment situated there, in which case tax may be levied in the other State but only on the profits attributable to that establishment (CAA Versailles, 1st chamber, 25 June 2019, No. 18VE01516, available on Légifrance). For a founder who already runs an operating French subsidiary, the treaty changes nothing: the subsidiary is a French resident company and its French trading profit is taxed in France. The treaty matters in two borderline situations you should recognise early. If you have no French company yet and simply sell into France from abroad with occasional travel, you are normally outside French corporate income tax until your presence crosses the stable-establishment line. If you operate through a registered French branch (succursale) rather than a subsidiary, the branch has no legal personality of its own but its French profits are taxed here under the same Article 209 logic. Founders sometimes ask whether keeping contracts, servers or staff deliberately outside France keeps the profit outside the French base. The answer turns on where the business is actually operated, not on where invoices are issued or where the shareholder resides, and the tax authority examines premises, people, decision-making and the habitual conclusion of contracts. Structure the substance honestly from day one, because an artificial arrangement discovered three years later produces back tax, interest and a far worse negotiation posture than a clean filing made on time.
One more boundary deserves a clear sentence because it traps newcomers every year. Corporate income tax is the tax on the company’s profit. It is not the TVA, the taxe sur la valeur ajoutée, the French value added tax collected on sales, which follows its own registration and return logic explained in our VAT guide for foreign-owned companies. It is not the withholding tax levied when profits leave France as dividends. And it is not the social charges on salaries. Your French company can therefore owe IS in a year when it distributes nothing, and it can distribute dividends only out of after-tax profit. Keep these three circuits separate in your accounts and in your calendar, and half the panic foreign founders feel each spring disappears.
B. The 25% rate and what a loss year really gives you
The computation itself is refreshingly simple today. Article 219, I of the Tax Code provides that “Le taux normal de l’impôt est fixé à 25 %.” The standard rate of the tax is set at 25%. After a decade of gradual reductions with different rates depending on the year and the profit bracket, recalled on the tax authority’s professional pages at impots.gouv.fr: Imposition des résultats, there is now a single standard rate to remember: one quarter of the taxable profit. A SAS earning 100,000 euros of taxable profit owes 25,000 euros of corporate income tax at the standard rate, before any credits. Reduced rates survive only for narrowly defined long-term gains and specific regimes that most operating subsidiaries never meet, so budget on 25% and treat anything better as a bonus your accountant confirms in writing. Note that this rate applies to the taxable profit, not to turnover and not to the accounting profit as such: the starting point is the commercial accounts, corrected by the tax adjustments of Articles 34 to 45 and the surrounding provisions, which add back non-deductible items such as fines, excessive depreciation or non-business expenses, and subtract items the statute exempts.
The most valuable relief for a young company is the treatment of losses, because the first French financial year often ends in the red: premises, salaries, compliance costs and slow early sales. French law does not refund the tax value of a loss, but it lets the loss travel forward in time. Article 209, I provides that “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”, meaning a loss suffered in one year is treated as a charge of the following year and deducted from that year’s profit up to 1,000,000 euros plus 50% of the taxable profit exceeding that first amount. Take a concrete case. Your SAS loses 400,000 euros in year one and earns 600,000 euros of taxable profit in year two. The whole 400,000 euros offsets year-two profit because it sits below the 1,000,000 euro threshold, so tax is computed on 200,000 euros only. Now suppose the year-two profit is 2,000,000 euros with 1,500,000 euros of carried losses. The cap bites: 1,000,000 euros plus half of the 1,000,000 euro excess, which is 500,000 euros, so 1,500,000 euros exactly, and the whole loss is absorbed with nothing left taxable beyond 500,000 euros. With 3,000,000 euros of profit and the same 1,500,000 euros of losses, the deductible amount is 1,000,000 plus half of 2,000,000, which is 2,000,000 euros, but the available loss is only 1,500,000 euros, so the full loss is used and 1,500,000 euros remain taxable. The statute adds that any unused excess is carried forward again on the same terms: “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.” If the profit is insufficient for the deduction to operate in full, the excess loss is carried forward on the same terms to subsequent years. There is no time limit on this forward carry, which is generous, but the 1,000,000 euro plus 50% ceiling means highly profitable turnarounds always leave a taxable minimum each year. A backward carry onto the previous year’s profit exists in theory under strict conditions and a capped amount, and it requires a formal claim; most foreign-owned SMEs never use it and should simply protect the forward carry by filing the loss return correctly and on time, because an undeclared loss is a lost loss.
Two practical warnings complete the picture before we turn to payment. First, the profit that bears the 25% must be a real business profit. Charges that serve the shareholder’s private life rather than the company,Abnormally low rents granted to the founder’s family, interest-free loans to the parent with no business justification, or invoices from related parties far above market price can be reclassified as abnormal management acts (actes anormaux de gestion), added back to taxable profit, and penalised. The administrative courts apply this doctrine constantly to French companies whatever the nationality of their owners, and the burden analysis was spelled out usefully by the administrative court of appeal of Marseille on 10 March 2021 in a case about rents granted to the founder’s family well below market level: the court held that the first judges could, “considérer au vu des éléments produits de part et d’autre, que l’administration avait démontré qu’en pratiquant des loyers nettement inférieurs, la société s’était volontairement privée de recettes, ce qui constitue un acte anormal de gestion”, meaning consider, in light of the evidence produced by both sides, that the administration had shown that by charging rents markedly below market the company had deliberately deprived itself of receipts, which constitutes an abnormal management act (CAA Marseille, 2nd chamber, 10 March 2023, No. 21MA04306, available on Légifrance). Read that sentence as an operating instruction: keep every intra-group agreement in writing, price it at arm’s length, document the business purpose, and never mix the company’s assets with your own. Second, remember that the IS is computed on the French company’s own accounts, which must themselves be kept under French accounting rules. That leads directly to the second half of this guide: the calendar, the forms and the controls that turn a correct computation into a payment the authority accepts without a fight.
II. How to declare and pay it from abroad without penalties
A. The four instalments and the May balance: dates, forms and online payment
France collects corporate income tax while the year is still running, through advance payments, and settles the exact amount the following spring. The mechanism is explained step by step on the official professional portal at impots.gouv.fr: Imposition des résultats and detailed in the tax authority’s official commentary, the BOI (Bulletin officiel des finances publiques-impôts), at BOI-IS-DECLA-20-10: versement d’acomptes provisionnels and BOI-IS-DECLA-20-30: obligations déclaratives et de paiement. Four instalments (acomptes) are payable no later than 15 March, 15 June, 15 September and 15 December of each year, each equal to one quarter of the corporate income tax paid on the previous year’s profits, declared on the instalment form No. 2571-SD (relevé d’acompte) that accompanies payment. When the financial year does not last twelve months, the instalments are computed on profits restated to a twelve-month basis. The balance (solde) is then declared on form No. 2572-SD and, where the year ends on 31 December, the official portal states the deadline plainly: the balance must be paid online no later than 15 May of the following year. New companies with no previous-year tax base pay no instalments in their very first year and settle the full first-year tax with the first balance; from the second year on, the instalment cycle starts automatically by reference to the first known assessment. Practically, everything is done from the company’s professional space (espace professionnel) on impots.gouv.fr, linked to the company’s SIREN number (the nine-digit official business identifier issued at registration), with payment by compulsory online debit (télépaiement). A founder living abroad should therefore secure three things long before March: access credentials to the professional account, a bank account capable of SEPA direct debit for the tax payments, and an accountant mandated to file and pay on the company’s behalf with a formal proxy. Our guide to opening and operating a French corporate bank account from abroad covers the banking side of this preparation.
Three refinements matter specifically to foreign-owned companies. First, the instalments are computed on the tax actually paid the previous year, not on your forecast, which means a bumper year automatically raises next year’s four instalments even if current business slows; the official commentary allows the company to stop or reduce instalments in defined situations, notably where the expected full-year tax will fall below the instalments already paid or where the company expects no tax at all, but the dispensation follows strict declaration conditions and a wrong estimate triggers late-payment interest on the shortfall, so never suspend an instalment on a bare assumption without a written computation from your accountant. Second, groups under the French tax-consolidation regime (intégration fiscale) pay through the parent, which changes who clicks what but not the calendar. Third, the 15 May balance deadline assumes a 31 December year-end, which most foreign subsidiaries adopt; if your French company closes on a different date, the balance deadline shifts with the return deadline described below, while the four instalment dates stay fixed by the calendar year. Diarise all five dates the day the company is registered, set the professional account to email alerts, and reconcile each debit against the 2571-SD or 2572-SD receipt, because from abroad an unnoticed missed instalment is discovered months later with interest already attached.
Payment discipline deserves emphasis because the French system punishes delay automatically. Late or missing instalments attract late-payment interest (intérêt de retard) running month by month from the due date, plus surcharges whose rates and caps depend on the procedure, and persistent failure can push the file toward enforced recovery. From abroad, the classic causes are always the same: no authorised SEPA account, credentials locked because the one-time code goes to a former employee’s phone, or an accountant who assumed the founder was paying directly. Solve all three in the first month: keep the professional-space login with the legal representative, register a backup contact, mandate the accountant in writing with explicit authority to télépayer, and keep a small buffer on the debit account around each 15th. The cost of this plumbing is trivial next to one quarter of interest on a missed instalment.
B. Accounts, tax return and surviving a reassessment from abroad
Before any tax form comes the accounting duty, and it sits in the Commercial Code rather than the Tax Code. Article L.123-12 of the Code de commerce provides that “Toute personne physique ou morale ayant la qualité de commerçant doit procéder à l’enregistrement comptable des mouvements affectant le patrimoine de son entreprise.” Every natural or legal person with trader status must record in the accounts all movements affecting the enterprise’s assets. The same article continues: “Elle doit établir des comptes annuels à la clôture de l’exercice au vu des enregistrements comptables et de l’inventaire.” Annual accounts must be drawn up at year-end on the basis of the accounting records and the inventory. For your French SAS or SARL this means chronological bookkeeping, a yearly stock-take of assets and liabilities, and annual accounts comprising the balance sheet (bilan), the profit-and-loss statement (compte de résultat) and the notes (annexe), which form an inseparable whole. The accounts must be approved by the shareholders within six months of year-end, filed with the commercial court registry, and they feed the tax return bundle known as the liasse fiscale. A founder abroad does not need to master French charts of accounts, but must understand that no credible IS return exists without compliant accounts behind it, and that the registry filing makes the accounts visible to banks, partners and the administration alike.
The return itself follows a deadline the statute states without ambiguity. Article 223, 1 of the Tax Code provides that “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.” The profit or loss return is filed within three months of the year-end, or no later than the second working day after 1 May where the year ends on 31 December. For the standard 31 December year-end, that means the first days of May: the return and the balance payment travel together in the same spring campaign, which is precisely why foreign founders should treat April as the month of maximum accounting mobilisation. The return is filed electronically with the SIE, the service des impôts des entreprises, the local corporate tax office competent for the company’s registered address, through the same professional account used for payment, and it includes the full bundle plus the schedules for loss carryforwards, credits and any withholding imputations under Article 220 of the Tax Code. File a loss year with the same care as a profitable one: as seen above, the carried loss exists only to the extent declared, and reconstructing it three years later during an audit is an uphill evidentiary battle.
Audits and reassessments are the final chapter, and distance changes nothing about your rights. If the authority questions the return, it must send a reasoned adjustment proposal before assessing: Article L.57 of the LPF, the Livre des procédures fiscales, the tax procedure code, provides that “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.” The administration sends the taxpayer an adjustment proposal which must be reasoned so as to allow observations or acceptance. You then have, as a rule, thirty days to reply in writing, to accept, to argue with documents, or to request a meeting, and that thirty-day window runs the same whether you live in Paris or in Singapore. The Marseille decision quoted above shows how the procedure plays out on substance: the company disputed the abnormal-management reclassification, the court examined the evidence from both sides, and it upheld the assessment because below-market rents to the founder’s family proved a deliberate deprivation of receipts. The lesson for a founder abroad is procedural as much as substantive. Keep every intra-group contract, transfer-pricing memo, invoice and bank proof for the full retention period. Answer every proposal within the deadline even if the answer is a reasoned refusal. Never ignore a registered letter because you were travelling: appoint your accountant or counsel as the correspondence address, activate electronic notification, and calendar the thirty days from receipt. Our guide to tax audits of foreign-owned French companies details the full verification procedure, the on-site visit, the penalties and the routes of challenge before the administrative courts.
Where reassessment touches cross-border flows, two companion topics complete your map and each has its own guide. Management fees charged by your foreign parent to the French subsidiary are deductible only with written agreements, arm’s-length pricing and proof of real services, failing which they join the abnormal-management additions described above. And when the after-tax profit finally leaves France as dividends, French withholding tax with treaty reductions applies at the distribution stage, which is a shareholder-level event distinct from the company’s IS. Master the IS first, because it is the base on which everything else is built: no clean IS, no distributable profit, no safe dividend.
Conclusion
French corporate income tax rewards founders who treat it as a calendar rather than a surprise. Your SAS or SARL is liable by its very form under Articles 205 and 206. France taxes the profit of the business operated in France under Article 209, with treaties allocating borderline cases to the stable establishment that actually earns the profit. The rate is a single 25% under Article 219. Losses travel forward without time limit within the 1,000,000 euro plus 50% annual absorption ceiling. Four instalments leave your account on 15 March, 15 June, 15 September and 15 December on form 2571-SD, the balance follows by 15 May on form 2572-SD for December year-ends, and the profit or loss return reaches the SIE within three months of closing or by the second working day after 1 May. Accounts under Article L.123-12 support the whole construction, and any reassessment must arrive as a reasoned proposal under Article L.57 that you can contest document by document. Put the five payment dates and the May return deadline in your diary the day the Kbis arrives, give your accountant a written mandate to file and télépayer, keep every related-party agreement priced and documented, and declare loss years as carefully as profitable ones. Run from abroad with that discipline, and the IS becomes what it should be for a growing company: a predictable quarter of French profit, paid on time, leaving a clean distributable balance to reinvest or repatriate.
Need a quick opinion on your case?
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