You live in London, New York, Dubai or Singapore, and the French company you set up from abroad — usually a SAS (société par actions simplifiée, the flexible joint-stock company most foreign founders choose) or a SARL (société à responsabilité limitée, the limited liability company with stricter statutory rules) — has closed its first financial year or is approaching the end of one. The questions arrive in the same order every time: how much French corporate tax does the company actually owe, when must it pay, what return must it file, what is that second local tax bill called CFE, and what happens if the French tax office disagrees with the figures? This guide answers those questions in English, for a business reader who runs a French company without living in France. Every French acronym is explained as it goes: IS (impôt sur les sociétés, corporate income tax), CGI (Code général des impôts, the French Tax Code), LPF (Livre des procédures fiscales, the Tax Procedures Book that governs audits and disputes), SIE (service des impôts des entreprises, the local corporate tax office that collects the company’s taxes), CFE (cotisation foncière des entreprises, the local business premises tax), and Kbis (the official company identity extract issued by the greffe, the registry of the commercial court).
The French system follows a simple logic once it is stated plainly. A French company pays tax on the profits of the business it operates in France, at a standard rate of 25 percent, through four advance payments during the year plus a final balance, and it reports everything on an annual company return filed electronically. It also pays the CFE, a local tax due even in loss-making years. If the administration considers the return wrong, it must send a reasoned correction proposal to which the company can reply before any extra assessment becomes final. Each stage holds a trap for a director who lives abroad: instalment dates missed because nobody diaried them, a return filed late because the accountant waited for foreign documents, a correction proposal answered out of time, or books that cannot be produced from a foreign office. Part I walks through what the company owes and when; Part II explains how to handle a reassessment and defend the company from another country.
I. How much French corporate tax your company owes and when it must pay it from abroad
Before any calendar or payment method, two questions decide everything: is your company liable for French corporate income tax at all, and on which profits? French tax law answers both with short statutory rules, and the rest of this Part follows from them. Part A explains who pays and at what rate; Part B explains how the tax is paid and reported during the year. Readers who are still choosing the legal vehicle itself should start with our companion guide on choosing between a SAS, a SARL, a branch and a subsidiary when setting up in France from abroad, which covers the registration steps that come before the first tax year discussed here.
A. Which profits France taxes at 25 percent and how losses move forward
The starting point is Article 206 of the CGI, which states 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”, meaning that public limited companies, partnerships limited by shares and limited liability companies are liable for corporate income tax whatever their business purpose, subject to the detailed exceptions that follow in the same article, for instance a SARL that has validly opted for the partnerships tax regime. In practice, the foreign founder’s SAS is liable for IS under the default regime: the SAS pays tax on its own profits at the company level, and the foreign shareholder is then taxed separately on what it receives, such as dividends or a capital gain on sale, under the applicable double-tax treaty and domestic rules. Newcomers sometimes assume that a French subsidiary with a foreign parent pays no French tax while its profits stay inside France; the opposite is true, because the subsidiary is a French taxpayer in its own right from the day it starts operating. A branch (succursale) of a foreign company registered in France is likewise taxable here on the profits attributable to its French activity, which is exactly why the choice of vehicle examined in our companion guide has tax consequences from day one.
The second boundary is territorial. Article 209 of the CGI provides that taxable profits are determined “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”, taking into account only the profits earned in businesses operated in France, plus certain listed categories of French-source income and profits attributed to France by a double-tax treaty. Concretely, a French subsidiary is taxed on the profits of its French business, while a foreign company without a French establishment generally stays outside French corporate tax except on the specific French-source items the statute and the treaty list. This is also where transfer pricing enters the picture for groups: where a French subsidiary buys services, licenses or goods from its foreign parent, the price charged must be the price independent companies would have agreed, because any excess shifts profit out of France and becomes the first thing an auditor examines. Keep every intercompany agreement, invoice and calculation method with the French company’s books, not only at the parent’s foreign office, since the French entity is the taxpayer that will have to justify the figures.
The rate itself is straightforward. Article 219 of the CGI provides that “Le taux normal de l’impôt est fixé à 25 %.”, the standard rate of the tax being set at 25 percent, applied to taxable profit rounded to the nearest euro. Small companies meeting the statutory conditions can benefit from a reduced rate on the first slice of profit, currently up to 42,500 euros with the remainder taxed at the standard rate, as the economy ministry’s business guidance explains on its page describing how corporate income tax works. Check each year whether your company still meets the turnover, capital-ownership and other conditions for the reduced rate rather than assuming it continues automatically, and have the accountant confirm the split in the return. After the company-level tax comes the shareholder level: dividends paid to a foreign shareholder may suffer French withholding with treaty relief and reclaim procedures, a subject covered in our guide on the annual legal calendar of a French company run from abroad alongside the accounts-approval steps that must precede any distribution.
Losses follow their own carry-forward logic, and it matters most to young companies whose first years are often negative. Article 209 of the CGI states 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”, meaning that a loss suffered in one year is treated as a charge of the following year and deducted from that year’s profit, within the statutory ceiling of 1,000,000 euros plus 50 percent of the taxable profit exceeding that amount, with any unused remainder carried forward again on the same terms. Unused losses therefore survive and shelter later profits, but only if the company tracks them year after year in its returns; a loss forgotten in the paperwork is a loss wasted. Foreign founders should ask their accountant, at the end of every year, for the running schedule of carried-forward losses and confirm it appears consistently in each new return.
The courts show every year what happens when the books cannot support the return. In a Paris administrative appeal decision of 10 April 2024, No. 22PA04057 (RC Transformation, full text on Légifrance), the reporting service recalled that “La société RC Transformation, qui exerce une activité de formation professionnelle, a fait l’objet d’une vérification de comptabilité pour la période du 1er janvier 2010 au 31 décembre 2013, à l’issue de laquelle le service a, par une proposition de rectification du 5 août 2013, rehaussé son résultat imposable à l’impôt sur les sociétés.” A training company underwent an accounting audit covering four years, after which the tax office, through a correction proposal, increased its corporate-taxable profit. The lesson for a company run from abroad is direct: the audit starts from the accounts, and a file kept only in the parent’s foreign system, in another language, or scattered across inboxes is the weakest possible starting position. Keep complete, reconciled French books at the company’s registered office or with its French accountant, ready to be produced.
B. Paying in four instalments, filing the return and paying the CFE every year
French corporate tax is not paid once a year after the return; it is prepaid in four instalments calculated from the last closed year’s results, with the return then settling the difference. Article 1668 of the CGI provides that “L’impôt sur les sociétés donne lieu au versement, au comptable public compétent, d’acomptes trimestriels déterminés à partir des résultats du dernier exercice clos.”, corporate tax gives rise to payment of quarterly instalments determined from the results of the last closed financial year. The same article fixes the diary that every foreign director should memorise: “Les paiements doivent être effectués au plus tard les 15 mars, 15 juin, 15 septembre et 15 décembre de chaque année.”, payments must be made no later than 15 March, 15 June, 15 September and 15 December of each year. Each instalment is paid with the advance-payment form No. 2571 (relevé d’acompte), and the economy ministry’s guidance describes the same mechanism: companies pay the tax through four quarterly advance payments made on advance-payment form No. 2571, computed from the last closed year’s results. Set up the four dates as recurring reminders shared between the director abroad and the French accountant, because an instalment missed from another country accrues interest exactly like one missed from Paris.
New companies get breathing room in year one. Article 1668 of the CGI adds that “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”, newly created companies, or companies newly subject to corporate tax, are exempt from paying instalments during their first year of activity. The first year’s tax is therefore paid as a balance once the results are known, and the instalment cycle starts from the second year by reference to that first result. Founders sometimes misread this as a first-year tax holiday; it is only a timing relief, and the full first-year liability still falls due with the balance. From the second year on, a profitable company that underpays its instalments faces a shortfall at balance time plus interest, while a company whose profit collapses can ask for its instalments to be adjusted downward under the statutory modulation procedure rather than overpaying all year and waiting for a refund.
The annual return then settles the account. A company liable for IS must file an annual statement of its results, with the documents and filing method depending on its tax regime (standard actual regime or simplified actual regime), and the filing is electronic in all cases, as the public business guidance confirms. The balance itself follows the same electronic channel on balance form No. 2572 (relevé de solde), due by the 15th day of the fourth month after the financial year ends for a standard 31 December year-end. In practice the French accountant transmits the whole package through the EDI-TDFC channel (échange de données informatisé, the electronic filing system used between accountants and the tax administration), which means the director abroad never files personally but must deliver complete documents early enough for the accountant to meet the deadline. The return is built from the approved annual accounts (bilan, compte de résultat and annexe), so the accounts-approval timetable and the tax timetable run in lockstep; our annual legal calendar guide shows how the shareholders’ meeting, the filing with the greffe and the tax return fit together in a single sequence.
Alongside corporate tax comes the CFE, the bill that surprises foreign founders most because it is due even when the company loses money. Article 1447 of the CGI states that “La cotisation foncière des entreprises est due chaque année par les personnes physiques ou morales” which carry on a habitual non-salaried professional activity, the CFE being due each year by individuals and legal persons in that position. The business guidance on the CFE on the public business service describes the CFE as a local tax due from any company or person carrying on an independent professional activity, subject to possible exemptions. It is assessed by municipality by reference to 1 January of the tax year, computed on the rental value of the premises the company uses or, where the company has little or no qualifying premises, on a minimum base that depends on turnover. A new company benefits from a specific scheme in the year of its creation, but from the second year the CFE is a fixed annual cost to budget regardless of profit. The same guidance gives the payment diary: the CFE is generally payable by 15 December inclusive. A company domiciled with an approved domiciliation provider in Paris pays CFE where it is domiciled, which is one more reason to choose the registered-office address with its local tax cost in mind.
Finally, late payment has a price that runs on its own. Article 1727 of the CGI provides that “Toute créance de nature fiscale, dont l’établissement ou le recouvrement incombe aux administrations fiscales, qui n’a pas été acquittée dans le délai légal donne lieu au versement d’un intérêt de retard.”, any tax claim assessed or collected by the tax administrations which has not been paid within the legal time limit gives rise to late-payment interest. Surcharges may be added on top where the Code so provides. Interest therefore accrues on a late instalment, a late balance, a late CFE payment, or additional tax after reassessment, regardless of good faith, and only the specific statutory exemptions, such as positions disclosed expressly with their legal reasoning on the return, can remove it. The message for a company run from abroad is blunt: diary the four instalment dates, the return date and 15 December for the CFE, pay through the company’s professional tax account on time, and treat any notice proposing extra tax as the start of a formal procedure with its own deadlines, which is the subject of Part II.
II. What to do when the French tax office reassesses your company while you live abroad
Most reassessments (redressements, the additional assessments issued after an audit) follow the same path: an audit, a formal correction proposal, a window for the company to reply, then assessment and collection, with claims and court action available afterwards. The procedure is adversarial by statute, which means the company has real rights, but only if it uses them in time and with documents. Part A explains the correction procedure and the central role of evidence; Part B explains how to close the year properly, pay or dispute the assessment, and appeal while the decision-makers live outside France.
A. Answering the correction proposal within the deadline and proving your figures
After an audit, whether an on-site examination of the accounts (vérification de comptabilité) or a desk review conducted from the office (examen de comptabilité), the administration cannot simply bill extra tax; it must first send a reasoned correction proposal. Article L57 of the LPF states the guarantee in one sentence: “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 correction proposal which must be reasoned so as to allow the taxpayer to submit observations or to signify acceptance. That single sentence carries the whole defence strategy: the proposal must explain itself well enough that the company can answer it, and the answer, observations sent within the statutory period, is the moment to stop the reassessment before it becomes a final assessment. The same article adds a practical lifeline for slow cross-border files: a request from the taxpayer received before the standard reply period expires extends that period by thirty days. A director abroad who receives a proposal should therefore do two things on day one: diary the reply deadline, and request the thirty-day extension in writing before it expires, to give the French accountant time to assemble the file.
On receipt, work through a fixed checklist before arguing the figures. Does the letter state the reasons for each adjustment, the amounts, the legal basis, the category of income concerned and the tax years at issue? Does it identify the documents it relies on? Anything missing becomes a ground of challenge, and the reply should say so explicitly rather than discussing only the numbers. Then comes the substance, and here the books decide most cases. Auditors test coherence first: do the declared results reconcile with the bank movements, the issued invoices, the supplier invoices, the payroll records (DSN, déclaration sociale nominative, the monthly electronic payroll return) and, for trading companies, the stock and customs records (with the EORI number, the EU customs identifier, where goods cross borders)? Gaps that are easy to explain in a meeting become indefensible on paper when the director is in another country, so the reply must attach the missing document rather than promise it. Intercompany charges from the foreign parent need particular care: produce the service agreement, proof the service was actually rendered, time records or deliverables, and the method used to set an arm’s-length price, because a management fee with no paper trail is routinely added back to taxable profit.
Distance changes the logistics, not the rights. Designate one French-based point of contact, usually the accountant or counsel, empowered to receive the correspondence and to access the professional tax account (espace professionnel on impots.gouv.fr, which also publishes the official tax calendar), and make sure every letter from the SIE is forwarded to the director the day it arrives. Keep a complete copy of the file, proposal, annexes, reply with proof of sending, and assessment notices, in one place, because a later claim or court case will be built entirely on that paper trail. Never ignore a proposal on the assumption that silence preserves the position: without observations, the assessment is issued on the administration’s figures alone, and the company then has to fight uphill through claims and courts to undo what a timely reply might have prevented. If the proposal is well reasoned and the adjustment is correct, partial acceptance of the well-founded points while disputing the rest is a legitimate strategy that narrows the dispute and limits interest and surcharges to what is genuinely contested.
B. Closing the year from abroad: allocating the profit, paying the balance and appealing
Once the accounts are approved and the tax return is filed, the shareholders must decide what happens to the after-tax result, and that decision follows its own corporate procedure. Article L232-12 of the Commercial Code provides that “Après approbation des comptes annuels et constatation de l’existence de sommes distribuables, l’assemblée générale détermine la part attribuée aux associés sous forme de dividendes.”, after approval of the annual accounts and confirmation that distributable sums exist, the shareholders’ meeting determines the share allocated to the shareholders as dividends. No dividend can be voted before the accounts are approved and distributable sums are established, and any dividend paid in breach of these rules is treated as a sham dividend (dividende fictif) with personal consequences for the directors and recipients. For a company run from abroad, the practical sequence is therefore fixed: approve the accounts, file and pay the tax, then vote the allocation of the result between legal reserve, retained earnings (report à nouveau) and dividends, and only then pay out. The meeting can be held by the means the articles allow, including videoconference and written consultation where the statutes permit, but the minutes, the allocation decision and the dividend payment trail must be as rigorous as if everyone sat in Paris, because a distribution examined during a later audit will be tested against this exact article.
If the assessment, whether on the original return or after a correction procedure, stands and the company disagrees, the dispute moves to claims and courts. The first step is a formal claim (réclamation) sent to the SIE that issued the assessment, setting out precisely which taxes, years and amounts are contested and on which legal grounds, with the supporting documents attached. Precision matters because a court later can only examine what the claim raised first; a vague claim produces a narrow case. Payment and dispute run on separate tracks: the tax remains collectible while the claim is examined unless collection is lawfully suspended, so the diary must track both the claim’s progress and the payment deadlines in parallel, with interest continuing to accrue on unpaid amounts under Article 1727 of the CGI for as long as they stay unpaid. Where the claim is rejected expressly or by silence after the statutory period, the company can take the case to the administrative court (tribunal administratif), then to the administrative court of appeal (CAA, cour administrative d’appel), as in the Paris decision cited in Part I, with further review before the Conseil d’État (the supreme administrative court) on points of law. Each level has its own time limit counted from notification of the previous decision, and missing one ends the case regardless of its merits, which is why a cross-border file needs a single calendar, kept by the French representative, recording every notification date and every appeal deadline.
Litigation posture should be decided early, not after two years of correspondence. Ask three questions as soon as the correction proposal arrives: is the legal basis of the adjustment actually wrong, or is it a question of missing proof that can still be supplied? Is the amount at stake proportionate to the cost of a full court case through one or two levels? And does the file contain a procedural defect, such as defective reasoning of the proposal, that a court could sanction? A strong procedural defect argues for fighting through the courts; a pure evidence gap argues for supplying the documents at the observations stage and settling; a small amount with weak prospects argues for a reasoned claim followed, if needed, by acceptance and a request for relief on surcharges. Throughout, keep the company’s compliance spotless on everything else: instalments paid, returns filed, CFE paid, payroll returns current. A taxpayer that disputes one adjustment while falling behind on everything else loses credibility with the administration and the judge alike, while a company whose file is otherwise perfect presents its challenge from a position of strength.
Conclusion
A French company run from abroad owes the same taxes as one run from Paris, with distance adding only organisation, never excuses. Corporate tax falls on the profits of the French business at the standard rate of 25 percent, prepaid in four instalments on 15 March, 15 June, 15 September and 15 December of each year, settled through the annual electronic return and its balance form, with carried-forward losses sheltering later profits where the returns have tracked them properly. The CFE arrives every year on top, due by 15 December even in a loss-making year, assessed where the company is domiciled. When the administration challenges the figures, the correction proposal must explain itself well enough to be answered, the company should secure the thirty-day extension and reply with documents rather than promises, and any remaining dispute follows the claim-to-court path with strict deadlines at every stage. Keep four dates diaried, one French-based contact empowered, books that reconcile, and profits allocated only after approval: managed that way, the French tax year holds no surprise that a director in London, New York, Dubai or Singapore cannot handle without boarding a plane.