You run a French company from London, New York, Dubai or Singapore. The company has French clients, a French bank account and a Kbis (the official company identity certificate issued by the greffe, the clerk’s office of the commercial court). Then a letter from the French tax administration arrives: instalments to pay, a tax return to file, or a proposed reassessment running into tens of thousands of euros. Distance makes everything harder: you cannot walk into the local tax office, your accountant writes in French, and the deadlines keep running while you are abroad.
This guide explains, entirely for a foreign owner living abroad, how French corporate tax works in practice: which profits France taxes and at which rate, how you file and pay the four quarterly instalments and the balance from another country, what triggers a reassessment in a foreign-owned company, and how you answer a proposed reassessment, ask for an independent commission and go to court without flying to Paris for every step. French acronyms are explained at first use: IS (impot sur les societes, corporate tax), CGI (Code general des impots, the tax code), LPF (Livre des procedures fiscales, the tax procedure code), DGFIP (Direction generale des finances publiques, the tax administration), CAA (cour administrative d’appel, administrative court of appeal).
The companion choice-of-vehicle guide remains useful if you have not yet incorporated or if you hesitate between structures: SAS, SARL or Branch: how a foreign founder chooses the right vehicle to do business in France. Once the company exists, the tax calendar below takes over.
I. How much corporate tax does your French company owe and when must you pay it from abroad?
French corporate tax is a tax on the company’s own profit, not on your personal income as a foreign shareholder. A French SAS (societe par actions simplifiee, simplified joint-stock company) or SARL (societe a responsabilite limitee, private limited company) pays IS on the profit it earns through business carried on in France. Dividends you later take out are a second step, with withholding tax and tax treaties, covered in a separate guide. Do not mix the two: the company pays IS first, and only distributed profit can then be taxed again in your hands under the rules on dividends.
A. Which profits does France tax and at which rate?
The starting point is territoriality. As a rule, only profit earned through business operated in France is taxable in France, plus profit whose taxation is attributed to France by a double tax treaty. The tax code states the scope in these terms, and your accountant applies it every year from the statutory accounts. In practice this means a French subsidiary that sells, invoices and delivers in France is fully taxable here, while a foreign parent that merely holds the shares is not taxable here on its own foreign profit. The borderline cases are permanent establishment risk, where the administration argues that activity carried on from abroad is really carried on in France, and transfer pricing, where it argues that profit was moved out of France. Both are examined in Part II.
The headline rate is simple. The tax code provides: “Le taux normal de l’impôt est fixé à 25 %.” That sentence means the standard rate of corporate tax is set at 25 percent. Read it here: Article 219 of the CGI, standard rate of corporate tax. Long-term capital gains on certain assets can be taxed separately at reduced rates, and the article details those regimes, but an operating trading company lives under the 25 percent rate on its current profit. Social contributions on top of IS have largely been absorbed into that rate for most companies, so 25 percent is the working number for your budget, before penalties and late interest if you miss a deadline.
The taxable base starts from accounting profit, then tax adjustments. French commercial law requires every trader to keep proper books: “Toute personne physique ou morale ayant la qualité de commerçant doit procéder à l’enregistrement comptable des mouvements affectant le patrimoine de son entreprise.” That is the accounting duty in Article L123-12 of the Commercial Code, and it means every movement affecting the company’s assets must be recorded chronologically, checked by inventory at least once a year, and reflected in annual accounts with balance sheet, profit-and-loss account and notes. The tax result then adds back non-deductible expenses, such as excessive penalties, and subtracts items such as qualifying dividends under the parent-subsidiary regime. If your bookkeeping is kept abroad or in English only, your French accountant must still rebuild compliant French statutory accounts, because the DGFIP works from those accounts, not from your group reporting pack.
Losses can be carried forward, which matters for a young company that invests before it earns. The mechanism allows a deficit of one year to be treated as a charge of the following year and set against later profit, within a limit of 1,000,000 euros plus 50 percent of the profit above that amount. The unused excess is carried forward again on the same terms. In plain terms, a 400,000-euro loss in year one shelters 400,000 euros of profit in year two, and a very large loss shelters at least 1,000,000 euros of each later profit plus half the remainder. Keep the loss computation clean, because the administration often attacks carried-forward deficits years later, and a foreign owner who changed accountants in the meantime struggles to defend old workings.
Three practical consequences follow for a founder living abroad. First, budget 25 percent of expected accounting profit, adjusted for add-backs your accountant identifies, and do not confuse it with value added tax, which is a tax on turnover collected from customers and passed to the State. Second, keep French statutory accounts in France, in French, signed and stored so they can be produced within days if the administration asks. Third, if the company is part of a foreign group, document every cross-border charge now: management fees, royalties, interest and cost recharges. The rate question is easy; the base question is where foreign-owned companies lose money, and Part II shows why.
Foreign founders also ask whether a branch (succursale) pays less than a subsidiary. The answer is generally no on the rate: a French branch of a foreign company is taxable on its French profit under the same rules. The difference lies elsewhere: governance, liability, payroll and credibility with banks and clients. If you already chose a SAS or SARL, stay with the calendar below rather than reopening the vehicle question for tax reasons alone. If you still operate through a branch, the instalment and filing mechanics described next apply to you as well, through your French representative.
B. How do you file and pay the four instalments and the balance from abroad?
French corporate tax is paid in advance, in four instalments, then balanced after the year ends. The rule is set by Article 1668 of the CGI on quarterly instalments: “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.” That means corporate tax gives rise to quarterly instalments paid to the competent public accountant, computed from the results of the last closed financial year. New companies are exempt from instalments during their very first year or first tax period, which helps cash flow at launch, but from year two the machine starts.
The calendar is fixed: “Les paiements doivent être effectués au plus tard les 15 mars, 15 juin, 15 septembre et 15 décembre de chaque année.” In English: payments must be made no later than 15 March, 15 June, 15 September and 15 December each year (Article 1668 of the CGI). Each instalment is roughly one quarter of the tax computed on the last known result, rounded to the nearest euro. Large companies with turnover above 250 million euros or 1 billion euros must top up the last instalment to 95 or 98 percent of the estimated tax for the current year, but a typical foreign-owned small or mid-size company simply pays four equal instalments based on last year, then settles the difference. The balance (solde), plus the tax return bundle (liasse fiscale, form 2065 with its schedules), is filed electronically in the months after year-end, generally within three months of closing for a 31 December year-end, extended in practice to mid-May for electronic filing. Your accountant tele-files and tele-pays through the professional tax account (espace professionnel on impots.gouv.fr); you as foreign legal representative sign the delegation (mandat) that authorises the accountant or a tax representative to act, and you keep access codes in a safe place because a lost password in November regularly causes a missed 15 December instalment.
Paying from abroad is allowed but must be anticipated. The payment is electronic, in euros, from a bank account that the DGFIP can debit through the SEPA system or that can transfer to the public accountant with the correct tax reference (reference d’obligation fiscale). A foreign bank account without SEPA direct-debit capability causes rejects; a transfer with a wrong reference sits unallocated while interest accrues. Practical routine: at least ten days before each 15th, confirm with your accountant the amount of the instalment, the account to be debited and the reference used; keep a euro balance sufficient for the debit; and ask for the payment receipt (avis de paiement) the next day. Companies whose French corporate bank account was hard to open should not wait until March to organise this: the instalment cannot be postponed because the bank paperwork is not ready.
Late payment is expensive even when the underlying tax is small. The 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.” That means any tax claim not paid by the legal deadline gives rise to late interest. See Article 1727 of the CGI on late interest. On top of interest, penalties for late filing, late payment and reassessed tax can reach 10 percent for simple delay, 40 percent for deliberate failure (manquement delibere) and 80 percent for abuse of law (abus de droit) or fraud. A Paris court recently recalled the wording in a dispute over additional late interest, recalling the article and noting: “Le taux de l’intérêt de retard est de 0,20 % par mois (depuis 01/01/2018). Il s’applique sur le montant des créances de nature fiscale mises à la charge du contribuable ou dont le versement a été différé.” Read the judgment here: Paris Judicial Court, 14 March 2024, No. 23/04912. Even though that case concerned registration duties rather than corporate tax, the court applied the same Article 1727 mechanism that punishes any late corporate tax instalment or balance. At 0.20 percent per month, twelve months of delay cost 2.4 percent plus any penalty, and the clock runs month by month from the first day of the month following the deadline until the last day of the month of payment.
Build a minimal calendar that works from abroad. January: close the books with your accountant and estimate the balance. March, June, September, December: pay each instalment by the 15th and archive the receipt. April-May: file the 2065 bundle and pay the balance. Keep every notice (avis), every receipt and every delegation in one shared file your successor or a new accountant can understand. If cash is tight, ask your accountant before the deadline about a payment plan (delai de paiement) or about modulating instalments when the current year will clearly be lower than last year; modulation is possible under conditions but a wrong modulation triggers its own penalty, so never modulate without a written computation. What you must never do is ignore the deadline because you are abroad, change address without updating the professional account, or assume that a tax treaty exempts the French company: the treaty allocates taxing rights between States, it does not dispense the French company from filing and paying in France.
II. How do you survive a reassessment when you live abroad?
A reassessment (redressement) is the administration’s correction of your tax after a documentary check (controle sur pieces) or an accounting audit (verification de comptabilite) at the company’s French premises. For foreign-owned companies the two classic battlegrounds are transfer pricing, where the administration says profit was shifted to the foreign parent through prices or fees, and accounting challenges, where it rejects provisions, reserves or charges for lack of proof. Distance does not pause the procedure: time limits run from notification to the company’s French registered office (siege social), and the first response often determines the rest. The good news is that the procedure is written, adversarial and reviewable, which suits an owner who works by documents and deadlines rather than by visits.
A. What triggers a transfer-pricing or accounting reassessment in a foreign-owned company?
Transfer pricing is the first risk. The key provision states: “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.” That means profits indirectly transferred to foreign related companies, whether by increasing or reducing purchase or sale prices or by any other means, are added back to the results shown in the accounts. See Article 57 of the CGI on indirect transfers of profit abroad. Dependence or control is not even required when the transfer is with a company in a privileged tax regime or a non-cooperative State. If documentation is missing or partial, the administration assesses the base from the information it holds under the adversarial procedure, and if no precise elements exist it compares with similar companies operating normally. When the company’s actual transfer-pricing method departs from the documentation it gave the administration, the gap is presumed to be an indirect transfer unless the company proves there was no transfer.
In practice the administration looks for familiar patterns. A French distributor buys exclusively from group companies abroad at prices that leave it a thin or loss-making margin while the group is profitable overall. A French subsidiary pays its foreign parent yearly management fees, brand royalties or IT recharges without contracts, without timesheets and without proof that the services were actually rendered and useful. A shareholder loan carries an interest rate above the deductible cap. Each pattern can be legitimate, but each must be priced as if between strangers (pleine concurrence, arm’s length) and proved by contemporaneous documents: group transfer-pricing policy, functional analysis, list of functions, assets and risks in France, method chosen among the accepted methods such as comparable uncontrolled price, resale-price-minus or transactional net margin, panel of comparables with rejection reasons, contracts, invoices and payment proof.
The Versailles court illustrated how hard these cases are fought. In a dispute involving a French exclusive distributor of medical electronic devices bought from other group companies, the company argued that “les règles de dévolution de la charge de la preuve en matière de transferts indirects de bénéfices ont été méconnues”, meaning the rules allocating the burden of proof on indirect transfers of profit had been disregarded, and it challenged the rejection of the resale-price-minus method, the use of the transactional net margin method and the panel of comparables. Read the decision here: Versailles Administrative Court of Appeal, 17 March 2022, No. 19VE02499, GE Medical Systems. Whatever the outcome in that file, the lesson for a foreign owner is clear: choose one method, apply it consistently, keep the documentation that justifies it, and expect the administration to test your comparables one by one. A cooperative that is in factual dependence or a manufacturer with a fabrication share can be excluded from a panel, and you must be ready to defend each inclusion and each exclusion.
Accounting challenges are the second risk and they hit even companies with no cross-border pricing. Provisions for risks, accelerated depreciation, stock write-downs and shareholder current-account waivers (abandons de creances) are routinely questioned. The administration asks for the invoice, the contract, the delivery proof, the timesheet or the valuation report, and a PDF stored on a former director’s laptop abroad is not a defence. Keep in France, or instantly accessible, the full chain: contract, order, delivery slip, invoice, payment, and for services from the parent, proof of actual performance and of benefit to the French company. Interest on shareholder advances from a foreign owner is deductible only within the legal cap and with proper resolutions; beyond that it is added back and may be recharacterised.
Prevention from abroad is straightforward and cheaper than litigation. Sign written intra-group agreements before the year starts, in English and French, with price, indexation and invoicing rhythm. Invoice monthly or quarterly, pay through the bank, and reconcile at year-end. Prepare the transfer-pricing documentation file when thresholds require it and a light file even when they do not. Approve the accounts on time, file the 2065 bundle consistently with the statutory accounts, and keep the inventory, the fixed-asset register and the expense reports available. Companies that do this receive shorter audits and smaller adjustments; companies that reconstruct everything after the auditor arrives pay more, even when their prices were economically fair.
B. How do you answer a proposed reassessment, go to the commission and go to court from abroad?
Every reassessment under the adversarial procedure starts with a reasoned document: the proposed rectification (proposition de rectification). The procedure code requires: “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.” That means the administration sends the taxpayer a proposed rectification which must be reasoned so that the taxpayer can submit observations or acceptance. See Article L57 of the LPF on the proposed rectification. You normally have thirty days to respond, extendable by thirty days on request made before expiry, plus specific extensions for lawyers and for complex files. The response is the most important letter of the whole case: it fixes your arguments, points to each exhibit, asks for what is missing, and requests the documents the administration relied on. A short acceptance to buy peace is sometimes rational for a tiny amount, but a vague reply that neither accepts nor contests, or a reply sent late to the wrong address, is the worst option because it preserves nothing and concedes the timetable.
After your observations, the administration replies, and if disagreement persists you can take the file to an independent body. The code provides: “Lorsque le désaccord persiste sur les rectifications notifiées, l’administration, si le contribuable le demande, soumet le litige à l’avis soit de la commission des impôts directs et des taxes sur le chiffre d’affaires prévue à l’article 1651 du code général des impôts” That means when disagreement persists, the administration, if the taxpayer asks, submits the dispute for an opinion to the commission on direct taxes and turnover taxes, or to other competent commissions. See Article L59 of the LPF on referral to the commission. The commission hears both sides, gives an opinion on facts such as comparable prices or accounting evaluations, and allocates the burden of proof for the later court stage depending on its opinion. It does not decide the law, but its opinion often unlocks settlement. Ask for it in writing within the deadline stated in the administration’s reply, send a clear memorandum with numbered exhibits, and attend by videoconference or through your lawyer when physical presence is impossible from abroad.
If the case continues, collection is enforced by a recovery notice (avis de mise en recouvrement), which you can challenge first by administrative claim (reclamation) to the tax office and then before the administrative court (tribunal administratif). For a Paris-registered company, the competent court is the Paris Administrative Court, with appeal to the Paris or Versailles CAA depending on the district, and final review before the Conseil d’Etat. Deadlines are strict: generally two months from the rejection of the claim to go to court, with distance extensions when you live abroad under the civil and administrative procedural rules. Everything can be handled by a French lawyer with a signed authority (pouvoir), electronic filing and a bank guarantee or escrow when you apply for suspension of payment (sursis de paiement). Note that asking for suspension does not stop late interest from accruing, as the Paris court recalled, so include the cost of time in every settlement calculation. Keep paying what is undisputed and contest only what is truly arguable; judges notice the difference.
A practical Paris note strengthens the calendar rather than creating a separate local article. If your registered office is in Paris or the Ile-de-France region, your file is handled by the Paris tax offices and, in court, by the Paris Administrative Court near the Palais-Royal, with appeals in Paris or Versailles. Practically this means: allow extra days for registered mail to reach a domiciliation agent (domiciliataire) who forwards to you abroad; give your domiciliation agent written instructions to scan every tax letter the same day; keep a French phone number or a responsive representative for the auditor’s calls; and prepare a bilingual exhibit index because Paris auditors and judges work in French even when your group works in English. None of this changes the national rules above, but in Paris files move fast and a missed forwarding delay is never accepted as an excuse.
Double tax treaties help at the margins but do not replace defence. A treaty can cap withholding on dividends, interest or royalties and can eliminate double taxation by credit or exemption in your home State, yet it does not prevent France from reassessing the French company’s base under Article 57 or from applying penalties. If the same profit is also taxed abroad, the mutual agreement procedure (procedure amiable) between the two States can relieve double taxation after the French reassessment, but that procedure is slow and requires a coherent transfer-pricing story in both countries. Coordinate your French defence with your home-country adviser from day one, keep both sides’ documentation consistent, and never tell France one margin story and the other State the opposite one.
Conclusion
Corporate tax for a French company run from abroad comes down to three habits. Price and document cross-border flows as if the administration will read them, because one day it will. Pay the four instalments on 15 March, 15 June, 15 September and 15 December from a funded euro account with the right reference, file the 2065 bundle on time, and treat late interest and penalties as a real cost. When a proposed rectification arrives, answer within thirty days with reasons and exhibits, ask for the commission when facts are debatable, and take a clean, well-indexed file to the administrative court if needed. A founder who keeps French accounts, contracts and payment proof within reach defends successfully from another country; a founder who reconstructs everything from memory pays for distance twice, once in tax and once in time.