You formed your French company from abroad, the Kbis company identity certificate arrived, clients pay your invoices, and the first profitable year closes. Then comes the letter or the online notice every foreign founder dreads: French corporate tax is due, and the numbers look nothing like the tax system back home. How much does your company really owe? When must it pay? What happens to early losses? And what do you do if the French tax office reassesses you while you live thousands of kilometres away?

This guide answers those four questions in order. It is written for non-French founders and foreign groups running a SAS simplified joint-stock company or a SARL private limited company in France. Every French acronym is explained, every key rule is tied to the exact statute or court decision behind it, and every deadline is given with the practical step a non-resident must take. Our companion walkthrough of the whole setup sequence, from bank account to Kbis, VAT number and first hire, is here: Setting Up a Company in France as a Foreign Founder. Read this corporate tax guide as its follow-up: formation gets you registered, corporate tax is what keeps you alive afterwards.

The short version before the detail. French corporate tax, called IS for impôt sur les sociétés, applies at a standard rate of 25 percent, with a reduced 15 percent rate on the first 42,500 euros of profit for qualifying small companies. Losses can be carried forward but only within a yearly cap. The tax is paid in four instalments during the year plus a final balance. Annual accounts must be approved within six months of year-end and filed with the court registry. And if the administration reassesses you, it must follow a strict contradictory procedure that gives you real weapons to fight back, even from abroad. The rest of this article proves each of those statements and shows you how to use them.

I. How Much French Corporate Tax Your Company Really Owes

Before any calendar or procedure, you need the economics right. Two questions decide your bill: does your company fall inside French corporate tax at all, and at which rate? A third question decides its future: what happens to the losses of the difficult early years? French answers surprise many foreign founders, so take them one by one.

A. Who Pays Corporate Tax in France: 25 Percent Standard Rate, 15 Percent Reduced Rate

French corporate tax is not optional and does not depend on what your company actually does. Article 206-I of the French General 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 n’ayant pas opté pour le régime fiscal des sociétés de personnes” (are liable for corporate tax, whatever their corporate purpose, public limited companies, partnerships limited by shares, and private limited companies that have not elected for partnership taxation): Article 206-I, General Tax Code, Legifrance. In practice, your SAS is liable by default, and your SARL is liable unless it validly elected otherwise in its first years. Foreign founders sometimes assume a holding company with no French sales escapes the tax. It does not: the criterion is the legal form and French tax residence, not the volume of local sales. If your company is registered with the French Trade and Companies Register, called the RCS and kept by the greffe commercial court registry, and managed from France, assume it is inside the scope until a lawyer tells you otherwise on your exact facts.

The standard rate is now single and simple. Article 219-I of the General Tax Code states: “Le taux normal de l’impôt est fixé à 25 %.” (The standard rate of the tax is set at 25 percent.): Article 219-I, General Tax Code, Legifrance. Every euro of taxable profit above the reduced-rate slice, described below, bears 25 percent. Taxable profit is rounded to the nearest euro. There are separate rates for specific long-term capital gains, but the operating profit of an ordinary foreign-owned subsidiary or startup is taxed at 25 percent, full stop. When you model your French margins from London, New York, Dubai or Singapore, use 25 percent as the baseline, not the rate of your home country and not an outdated French rate you may remember from years ago.

The reduced rate is where small foreign-owned companies save real money, and where many overpay by ignorance. The same Article 219 provides that “pour les redevables ayant réalisé un chiffre d’affaires n’excédant pas 10 millions d’euros au cours de l’exercice ou de la période d’imposition, ramené s’il y a lieu à douze mois, le taux de l’impôt applicable au bénéfice imposable est fixé, dans la limite de 42 500 € de bénéfice imposable par période de douze mois, à 25 % pour les exercices ouverts en 2001 et à 15 % pour les exercices ouverts à compter du 1er janvier 2002” (for taxpayers with turnover not exceeding 10 million euros in the financial year, reduced if necessary to twelve months, the applicable rate is set, within the limit of 42,500 euros of taxable profit per twelve-month period, at 25 percent for years opened in 2001 and 15 percent for years opened from 1 January 2002): Article 219-I-b, General Tax Code, Legifrance. Three conditions sit inside that sentence, and each traps unwary founders. First, turnover must stay at or below 10 million euros, assessed group-wide if your French company heads a French tax group. Second, only the first 42,500 euros of profit per twelve-month period qualifies; everything above pays 25 percent. Third, the capital must be fully paid up and at least 75 percent continuously held by individuals or by qualifying companies. A subsidiary wholly owned by a foreign corporate group can fail that third test depending on the chain of ownership, so check the shareholding structure before assuming the 15 percent applies. On a 42,500-euro profit, the difference between 15 and 25 percent is 4,250 euros every year: worth one verification, every year.

Two practical consequences follow for your first business plan. First, compute your effective burden on a two-slice basis: 15 percent up to 42,500 euros if all conditions hold, 25 percent beyond. Second, remember that dividends your company later distributes to you abroad face their own withholding layer on top of this corporate tax, governed by separate rules and tax treaties. Do not confuse the two levels: the 25 percent hits the company on its profit, and any later distribution tax hits the shareholder on the dividend. Mixing them up is the single most common modelling error we see in foreign founders’ spreadsheets.

Official guidance confirms the mechanics in plain language. The French public service for businesses explains that corporate tax is settled through quarterly instalments and one final balance, with payment dates of 15 March, 15 June, 15 September and 15 December depending on the company’s year-end date: Corporate income tax (IS): rates, declaration, payment, Service-Public.fr. The tax administration’s professional portal describes the same result-taxation framework for companies: Imposition des resultats, impots.gouv.fr. And the Economy Ministry summarises how the tax works for operating businesses: L’impôt sur les sociétés, comment ca marche, economie.gouv.fr. Use these pages as your standing references; the statutes below give you the enforceable detail.

B. Early Losses Are Not Lost: Carryforward Capped at 1 Million Euros Plus 50 Percent

Almost every foreign-owned French company loses money at first: setup costs, the company formation agent, the first salaries, rent for the Paris office, marketing before revenue. French law does not waste those losses. It lets you carry them forward against future profits, but within a yearly ceiling that founders must understand before promising investors a tax shield.

Article 209-I of the General Tax Code 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” (where a loss is incurred in a financial year, that loss is treated as a charge of the following year and deducted from the profit of that year up to 1 million euros plus 50 percent of the taxable profit of that year exceeding that first amount): Article 209-I, General Tax Code, Legifrance. Any unused excess carries forward again on the same terms, year after year, without time limit. Work through the arithmetic once and it stays with you. Suppose your company accumulated 2 million euros of losses, then earns 1.6 million euros of profit. It may deduct 1 million euros plus 50 percent of the 600,000 euros above 1 million, meaning 1.3 million euros, leaving 300,000 euros taxable at 25 percent despite 2 million of carried losses. The remaining 700,000 euros of losses survive for later years. Large turnarounds therefore always leave a taxable minimum each profitable year: there is no year where carried losses wipe out the bill entirely once profit passes 1 million euros.

Courts apply this machinery strictly, and one decision every SAS founder should know proves that loss positions are litigated to the euro. The Administrative Court of Appeal of Douai heard a simplified joint-stock company, a SAS, asking the court to fix its carried loss at 653,868 euros after its year ended in 2013 and to offset it against later profitable years: CAA Douai, 15 October 2020, No. 18DA02533, Legifrance. The court recalled the procedural gate: “une société ne peut critiquer devant le juge de l’impôt le montant d’un déficit déclaré qu’à l’occasion du premier exercice bénéficiaire sur lequel ce déficit serait reportable, hormis le cas où le montant de ce déficit procède d’une erreur commise par l’administration” (a company may challenge the amount of a declared loss before the tax judge only at the time of the first profitable year against which that loss could be carried, except where the amount of that loss results from an error by the administration). The lesson for you is operational, not academic. Declare losses carefully every year through your tax return package, called the liasse fiscale, keep the working papers proving each item, and expect your real fight over the loss amount to happen in the first profitable year, not earlier. A founder who discovers an old error in a loss figure cannot simply reopen ancient history at will; the challenge belongs to the year the loss is used, unless the administration itself made the error.

Three housekeeping rules protect your carryforward while you run the business from abroad. First, file every annual tax return even in loss years: undeclared losses are hard to defend later. Second, track the 1-million-plus-50-percent cap in your forecasts so investors see realistic post-turnaround tax charges. Third, remember that a radical change of activity can forfeit old losses, so clear any pivot, asset sale or dormancy period with your accountant before acting. Losses are an asset; administer them like one.

II. Paying on Time and Fighting Back From Abroad

Knowing the rate and the loss rules is half the job. The other half is timing and defence: paying through the right channel on the right date, approving and filing accounts through the right bodies, and answering a reassessment with the procedure the law gives you. Distance makes each step harder, so this part is written as an operating manual for a founder who is not in France.

A. The Calendar You Cannot Miss: Six Months to Approve, One Month to File, Four Instalments to Pay

French company law runs on a fixed annual cycle, and missing a step costs penalties that compound fast. Start with the shareholders’ approval. In a SARL, Article L223-26 of the Commercial Code provides: “Le rapport de gestion, l’inventaire et les comptes annuels établis par les gérants, sont soumis à l’approbation des associés réunis en assemblée, dans le délai de six mois à compter de la clôture de l’exercice sous réserve de prolongation de ce délai par décision de justice.” (The management report, inventory and annual accounts drawn up by the managers are submitted for approval by the shareholders in meeting within six months of the close of the financial year, unless that period is extended by court order.): Article L223-26, Commercial Code, Legifrance. If the meeting is not convened in time, the public prosecutor or any interested person can ask the court to order the managers to convene it, if necessary under penalty. In a SAS, the articles of association set the decision process, but the law reserves annual accounts and profits to collective shareholder decision: “les attributions dévolues aux assemblées générales extraordinaires et ordinaires des sociétés anonymes, en matière d’augmentation, d’amortissement ou de réduction de capital, de fusion, de scission, de dissolution, de transformation en une société d’une autre forme, de nomination de commissaires aux comptes, de comptes annuels et de bénéfices sont, dans les conditions prévues par les statuts, exercées collectivement par les associés” (the powers of extraordinary and ordinary general meetings of public limited companies regarding capital increases, mergers, appointment of auditors, annual accounts and profits are exercised collectively by the shareholders under the conditions set by the articles): Article L227-9, Commercial Code, Legifrance. Organise the written consultation or video meeting early: shareholders abroad can validly decide if the articles allow it, but the six-month discipline is the same.

Next comes filing with the registry. Article L232-22 of the Commercial Code requires every SARL to file with the greffe “dans le mois suivant l’approbation des comptes annuels par l’assemblée ordinaire des associés ou par l’associé unique ou dans les deux mois suivant cette approbation lorsque ce dépôt est effectué par voie électronique” (within one month of approval of the annual accounts by the ordinary shareholders’ meeting or the sole shareholder, or within two months of that approval where filing is electronic): Article L232-22, Commercial Code, Legifrance. The filed package includes the annual and where applicable consolidated accounts, the management documents, the auditors’ reports and the proposed allocation of profits. Electronic filing, now the norm through the single business counter called the guichet unique run with the INPI National Industrial Property Institute, earns you the two-month window. Late filing draws fines, blocks your updated Kbis, and signals distress to banks reading your file. The publication of key filings in BODACC, the official bulletin of civil and commercial announcements, means your compliance record is public: lenders and partners check it.

Then comes the money itself. As the public service page confirms, corporate tax is paid as four quarterly instalments plus a final balance, falling on 15 March, 15 June, 15 September and 15 December depending on your year-end: Corporate income tax (IS): rates, declaration, payment, Service-Public.fr. Each instalment is computed from the last known annual result, and the balance reconciles everything after year-end. A company whose year ends on 31 December pays instalments in March, June, September and December of the current year, then the balance the following spring. New companies with no prior result pay minimum instalments or settle at the balance stage under the detailed rules set out in the administration’s official commentary, the BOFiP published tax doctrine: ask your accountant to calibrate the first year explicitly, because founders abroad often discover the instalment logic only when a debit hits the company account. Keep the company bank provisioned before each 15th: a missed instalment triggers collection steps automatically.

Late payment is punished by interest that runs without mercy. Article 1727-I of the General Tax Code provides: “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.” (Any tax debt assessed or collected by the tax administrations that has not been paid by the legal deadline gives rise to late-payment interest.): Article 1727, General Tax Code, Legifrance. Penalties can add to that interest. From abroad, the defences are practical: a French direct-debit mandate on a funded account, calendar alerts ten days before each instalment date, and a standing instruction to your accountant to confirm each payment in writing. If cash is genuinely short, negotiate a payment plan with the public accountant, the comptable public, before the deadline, not after enforcement starts. The administration helps founders who warn early and punishes silence.

B. When the Tax Office Reassesses You: Contradictory Procedure and How to Challenge From Abroad

Reassessment usually starts with an audit of the company accounts, called a vérification de comptabilité, or a desk review. One morning your accountant forwards a formal document: the administration disputes deductions, transfer prices with your foreign parent, or the loss carryforward, and proposes extra tax. Panic is the wrong response. French procedure gives you structured rights, and courts annul reassessments when the administration cuts corners. Here is the machinery, then the playbook for using it from another country.

The foundation is the contradictory procedure. Article L55 of the Tax Procedures Book provides that where the administration finds an insufficiency or error in the tax base, “les rectifications correspondantes sont effectuées suivant la procédure de rectification contradictoire définie aux articles L. 57 à L. 61 A” (the corresponding adjustments are made under the contradictory adjustment procedure defined in Articles L.57 to L.61 A): Article L55, Tax Procedures Book, Legifrance. And Article L57 states: “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 a proposed adjustment that must state reasons enabling the taxpayer to submit observations or acceptance.): Article L57, Tax Procedures Book, Legifrance. The taxpayer then has, as a rule, thirty days to reply, extendable by thirty more days on request made before expiry. Those words matter: a vague proposal is not a valid proposal, and your observations are not a formality. They force the administration to answer before any assessment becomes final.

Courts enforce the motivation requirement severely, and a Paris decision shows exactly what defeats the administration. The Administrative Court of Appeal of Paris examined a proposed adjustment that rejected business expenses as allegedly private benefits without identifying a single one: CAA Paris, 6 July 2021, No. 19PA02380, Legifrance. The court recalled the standard: the administration “doit indiquer au contribuable, dans la proposition de rectification, les motifs et le montant des rehaussements envisagés, leur fondement légal et la catégorie de revenus dans laquelle ils sont opérés, ainsi que les années d’imposition concernées, de manière à permettre au contribuable de formuler ses observations de façon entièrement utile” (must state in the proposed adjustment the reasons and amounts of the planned increases, their legal basis, the income category, and the tax years concerned, so the taxpayer can submit fully informed observations). Because the proposal listed a global 402,884 euros without identifying any disallowed expense, the taxpayer could not usefully reply, and the reasoning collapsed. Apply that test to every proposal your company receives. Does it name each disputed item, the amount per item, the legal basis, and the year? If whole pages assert conclusions without line-by-line identification, your response should say so immediately and invite the judge to draw the consequences later.

Your defence from abroad follows five steps. First, appoint a French point of contact the day the audit starts: your accountant plus a lawyer, with written powers to receive documents and meet the auditor. Time limits run from notification, and a founder travelling across time zones cannot afford postal delays. Second, answer the proposed adjustment within the deadline with item-by-item observations, attaching contracts, invoices, bank statements and transfer-pricing documentation. Silence counts as acceptance in practice. Third, if the administration confirms the adjustment, file a formal claim, called a réclamation contentieuse, then appeal to the Administrative Court, the tribunal administratif, and if needed to the Administrative Court of Appeal, the cour administrative d’appel, and the Council of State, the Conseil d’État. Remember the Douai lesson above: disputes over loss amounts crystallise in the first profitable year of use, so align your claim strategy with that year. Fourth, consider requesting a payment deferral with guarantees while the dispute runs, so enforcement does not drain the operating account mid-case. Fifth, keep every deadline in a shared calendar with your advisers: French tax litigation forgives almost nothing on time limits.

Two warnings close this section. Transfer pricing between your French company and its foreign parent draws systematic attention: document every intra-group charge as if the auditor were already reading it. And never treat a reassessment proposal as a negotiation opener to be handled by phone alone. Everything must be answered in writing, within the contradictory procedure, because only the written record reaches the judge if the case goes to court.

Conclusion

French corporate tax rewards founders who treat it as a management discipline rather than a year-end surprise. Price 25 percent into every margin model, verify each year whether the 15 percent slice on the first 42,500 euros is available, and administer losses as the asset they are within the 1-million-plus-50-percent yearly cap. Run the annual cycle without exception: shareholder approval within six months, registry filing within one or two months depending on the channel, four instalments on the 15th of March, June, September and December adjusted to your year-end, and a funded account before each date. And if the administration reassesses you, hold it to the contradictory procedure: demand an itemised, legally grounded proposal, answer it line by line inside the deadline, and carry the fight through the claim and court stages with advisers on the ground. A founder in another country who masters these five reflexes pays the right amount, never more, and never pays for the administration’s shortcuts. That is the whole difference between suffering French tax and managing it.

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