You formed a company in France, you run it from London, New York, Dubai or Singapore, and the first profitable year is closing. The French accountant writes “IS dû” on the summary, the bank asks for the tax notice, and you realise you do not know what France taxes, at what rate, when the money must leave the account, or how you defend yourself if the tax office disagrees. This guide answers those four questions for a foreign founder or foreign group with a French vehicle.
French corporate income tax is called impôt sur les sociétés, universally shortened to IS. It is a tax on the profits of the French company itself, not on you as the shareholder. Dividends you later take out are a second step, with their own withholding logic. Here we deal only with the company level: what falls into French IS, the 25% rate and how losses soften it, the declaration and the quarterly instalments, the parallel local charge every company pays, and the procedure to challenge a reassessment without flying to Paris. Every acronym is explained on first use: Kbis (the official company identity extract issued by the greffe, the commercial court registry), BODACC (the official bulletin publishing company life events), URSSAF (the social security collection agency, mentioned only to distinguish it from tax), CFE (cotisation foncière des entreprises, the local business premises tax), DSN (déclaration sociale nominative, the monthly payroll return), DGFiP (Direction générale des finances publiques, the tax administration). If you are still choosing the vehicle, read first our companion on setting up a company in France as a foreign founder; if the profit has already been distributed, our guide on taking dividends out of France takes over where this one stops.
The stakes are concrete. Miss the declaration deadline and penalties accrue automatically. Miss an instalment and interest runs. Accept a reassessment you could have contested and the amount becomes final. But the reverse risk also exists: ignoring a reassessment letter because you live abroad never cancels it. French tax procedure gives you real weapons, short deadlines included, and every one of them can be used by correspondence and through a representative. This article shows you the calendar, the amounts, and the defence path.
I. What France taxes when the owner lives abroad and at what rate
A. Which profits does French corporate tax catch when you run the company from abroad?
Start with the simplest question: is your French company liable to IS at all? The answer is almost always yes if you incorporated in France. Article 206 of the 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”, alongside cooperatives and other legal persons carrying on profit-making operations. In plain English: a société par actions simplifiée (SAS, the flexible joint-stock company foreigners use most), a société à responsabilité limitée (SARL, the closed limited liability company), and a société anonyme (SA, the classic public limited company) fall within IS as a matter of principle, whatever their business. Partnerships that have not opted in, and some transparent vehicles, stay outside, but the standard SAS and SARL you incorporated through the guichet unique (the single online company registration portal) are inside.
The second question matters more for foreign groups: what if the real decision-maker is abroad, or what if a foreign company simply does business in France without incorporating? French IS follows the business done in France, not the passport of the owner. Article 209, I of the General Tax Code states that taxable profits are determined “en tenant compte uniquement des bénéfices réalisés dans les entreprises exploitées en France”, with the addition of certain listed categories and profits attributed to France by a double-tax treaty. In plain English: only profits made by businesses operated in France count, plus items French treaties reserve to France. A French-registered SAS operating from Paris is taxed on its French business even if its sole shareholder lives in Delaware and its president connects from a laptop in Lisbon. Conversely, a foreign company with no French operation owes no French IS.
Courts apply this territorial rule firmly, and they look at facts, not letterheads. In a decision of 9 January 2025 (Court of Appeal of Nîmes, No. 23/02221, official text on courdecassation.fr), the judges recalled on the basis of Article 209 that “les sociétés dont le siège est situé hors de France sont, quelle que soit leur nationalité, imposables en France à raison des profits tirés de leur exploitation dans ce pays”. The case concerned a company registered in Gibraltar whose manager lived in France and whose software design, assistance, maintenance, data management and storage work was performed from France for deployment on French territory. The court held French tax law applicable because direction, main establishment and activities were run from France, even though the articles of association pointed to a foreign registered office. The lesson for a foreign founder is symmetrical: simply designating a foreign head office in your documents does not move profits out of France when management and operations sit in France, and operating from abroad does not move French-source profits out of France either.
Three practical consequences follow. First, if you created a French SAS or SARL, assume full IS liability on its French profits from day one and organise accounting accordingly, even if you never set foot in France. Second, if your foreign company only sells into France from abroad with no French establishment, no French staff and no dependent agent, the analysis is different and turns on the applicable tax treaty; do not assume IS liability, but do not assume exemption either without checking the treaty tie-breakers. Third, the boundary between these two situations is exactly where audits start: a foreign company with a French-based manager, a French secondary establishment declared at his home, or contracts performed from France will be tested against the “entreprise exploitée en France” standard. Keep evidence of where decisions are made, where staff work, and where services are rendered, because the administration will ask for it.
One more distinction protects you from a classic confusion. IS is owed by the company. Social charges collected by URSSAF on salaries are a separate circuit, and value added tax (VAT) is a separate circuit again. A reassessment on one does not automatically mean a reassessment on the others, and the procedures differ. When your accountant says “contrôle fiscal” (tax audit), ask which tax and which years; when the letter says “contrôle URSSAF”, that is the social security audit described in our companion on URSSAF audits. Mixing the envelopes is how deadlines get missed.
Finally, foreign founders often ask whether withholdings suffered at source reduce the IS bill. They can, on proof. Article 220, 1 of the General Tax Code provides that “Sur justifications, la retenue à la source à laquelle ont donné ouverture les revenus des capitaux mobiliers, visés aux articles 108 à 119 , 238 septies B et 1678 bis , perçus par la société ou la personne morale est imputée sur le montant de l’impôt à sa charge en vertu du présent chapitre”. In plain English: withholding tax on investment income received by the company is credited against its IS on production of supporting documents, within the limit of the fraction of IS corresponding to that income. Keep the certificates; without them the credit is refused.
B. How much does France take and how do losses soften the bill?
The headline rate is simple. Article 219, I of the General Tax Code states: “Le taux normal de l’impôt est fixé à 25 %.” Taxable profit is rounded to the nearest euro, and the normal rate applied to it is 25%. There is no longer a reduced 15% standard band for small companies at the level of the normal rate itself; special separate rates exist for specific long-term capital gains and narrowly defined items, but a foreign founder should budget 25% on operating profit as the working assumption and let the accountant test whether any separate-rate item applies. Ask for the breakdown in writing: profit taxed at the normal rate, items taxed separately, credits deducted. If the summary shows a single line “IS 25%” with no detail, you cannot verify anything.
Losses are where foreign founders lose the most money through inattention. French law allows forward carry of deficits, but with a cap, and the cap is litigated every year. Article 209, I, third paragraph of the General Tax Code provides: “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”. In plain English: a loss becomes a charge carried to the next year and deducted from that year’s profit, but only up to 1 million euros plus 50% of the taxable profit exceeding that first million. Any unused excess moves forward again on the same terms. The mechanism is automatic in logic but not in practice: it must be tracked year by year in the tax return, and the administration checks the arithmetic during audits.
A very recent case shows how sharp this fight gets. On 1 October 2026 the Administrative Court of Appeal of Marseille (No. 25MA02720, official text on legifrance.gouv.fr) dealt with a property-management SARL contesting additional IS for the year closed in 2020. The company had declared a profit of 1,702,482 euros on which the audit had computed the carryforward ceiling, and argued that 1,668,346 euros of that figure was the reversal of a provision caused by an accounting error that should have been corrected, with new litigation still possible at 31 December 2020. It also raised a constitutional challenge to the third paragraph of Article 209, I and a human-rights argument. The Marseille court had to decide whether the declared profit, provision reversal included, fixed the ceiling, and whether the cap itself survived the constitutional attack. Whatever the final outcome on the merits in any given file, the message for a foreign-run company is clear: the million-plus-50% ceiling is computed on the profit as legally determined for that year, provisions and reversals included, and correcting an alleged accounting error years later requires proof, not assertion. Book provisions carefully, document litigation risks in real time, and never assume a provision can be rewritten after the audit starts.
Two further points complete the rate picture. First, late payment costs money beyond the tax itself: interest for late payment (intérêt de retard) accrues month by month, plus penalties where the administration shows bad faith or failure to file. These appear on the collection notice (avis de mise en recouvrement) as separate lines; paying only the principal and ignoring the interest leaves a balance that keeps the file open. Second, group relief (intégration fiscale) allows a French parent holding at least 95% of subsidiaries to consolidate results, so losses of one offset profits of another, but the regime requires formal option and strict holding conditions. A foreign parent with a single French SAS cannot consolidate alone; with two or more French subsidiaries it can, provided the French parent or designated head entity meets the threshold. Discuss this before year-end, not after, because the option has its own timetable.
A numerical example fixes ideas. Your SAS closes its first full year with 400,000 euros of taxable profit and no carried losses: IS at 25% is 100,000 euros before credits. Suppose instead the first year ended with a 900,000-euro deficit properly declared, and the second year shows 2,000,000 euros of profit. The carryforward ceiling is 1,000,000 plus 50% of (2,000,000 minus 1,000,000), namely 1,500,000 euros. The 900,000-euro loss fits inside and wipes out 900,000 of profit, leaving 1,100,000 taxable, or 275,000 euros of IS. Suppose instead the carried loss is 1,800,000 euros: only 1,500,000 can be used this year, 300,000 carries onward. Founders who never filed the loss schedule discover at audit that the loss they “remember” does not exist in the administration’s systems. File it, keep the returns, and reconcile every year.
II. How you declare, pay and defend the bill without living in France
A. When do you file, when does the cash leave, and what is the CFE on top?
The declaration comes first and it has a hard deadline. Article 223, 1 of the General 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.” In plain English: file the profit-or-loss return within three months of year-end; for a 31 December year-end, no later than the second working day after 1 May. The return must state the figures from which IS is computed and list amounts the company asks to credit under Article 220, with supporting accounts, minutes and distribution schedules attached as the paragraph details. From abroad, this means your French accountant needs closing documents months earlier than you think: March is late for a December year-end, April is dangerous, and May leaves no margin for a missing signature.
Payment runs on a different clock from filing, and this surprises every foreign founder. IS is paid in four advance instalments (acomptes) computed from the last closed year’s results, then balanced on filing. Article 1668, 1 of the General Tax Code sets the mechanism: quarterly advances based on the last closed year, with the rule that “Les paiements doivent être effectués au plus tard les 15 mars, 15 juin, 15 septembre et 15 décembre de chaque année.” New companies, and companies newly subject to IS, are exempt from instalments for their first year or first tax period. The same article then organises the final settlement: “Il est procédé à une liquidation de l’impôt dû à raison des résultats de la période d’imposition mentionnée par la déclaration prévue au 1 de l’article 223”, with any balance paid when the balance return is filed, no later than the 15th of the fourth month after year-end, and any overpayment refunded. Large companies face a reinforced last-instalment rule calibrated on estimated tax (95% or 98% depending on turnover thresholds the article details), which your accountant must compute; small SAS structures of foreign founders rarely hit those thresholds, but groups do.
Translate this into a cash calendar for a standard December year-end SAS in its second year and beyond. 15 March: first instalment based on last year’s profit. 15 June: second instalment. Early May: file the return for the year just closed (second working day after 1 May) and compute the true IS. 15 June also absorbs the balancing logic through the return cycle. 15 September: third instalment toward the current year. 15 December: fourth instalment. 15 April of the following year (fourth month after December): balance payment if the instalments fell short, via the balance return (relevé de solde). Every payment goes to the competent public accountant (comptable public) through the company’s professional tax account (espace professionnel on impots.gouv.fr), by direct debit or transfer. From abroad, set up the SEPA mandate early: a rejected debit on 15 December because the foreign bank blocked the mandate is treated as non-payment, not as an excuse.
On top of IS sits a local charge foreigners always forget: the CFE. Article 1447, I of the General Tax Code provides: “La cotisation foncière des entreprises est due chaque année par les personnes physiques ou morales, les entités non dotées de la personnalité morale ou les fiduciaires pour leur activité exercée en vertu d’un contrat de fiducie qui exercent à titre habituel une activité professionnelle non salariée” In plain English: every person or company habitually carrying on a non-salaried professional activity owes the CFE each year. Domiciliation at a Paris business centre (centre de domiciliation) does not exempt you; the CFE follows the activity, with the base depending on the rental value of premises or a minimum base where premises are minimal. New companies are exempt for their first calendar year, then billed each autumn with payment typically due in mid-December. Budget it separately from IS: a profitable year and a loss-making year both generate CFE. The bill arrives in the professional account; founders who never opened that account discover the debt with penalties two years later. Open the account at incorporation, check it quarterly, and mandate the accountant to monitor it.
Practical organisation from abroad therefore looks like this. January: close the books, confirm the accountant has all invoices and bank statements, including the capital deposit certificate and shareholder loan paperwork. February: review the draft return, verify loss carryforwards carried from prior years, and confirm instalment amounts for March and June. March: pay the first instalment and file nothing yet. April: sign the return in time for the early-May deadline, compute the balance, and fund the account. May: file. June, September, December: pay instalments on the 15th without waiting for reminders. October to December: check the CFE assessment and pay it. Keep every receipt: French procedure rewards the taxpayer who produces dated proof and punishes the one who reconstructs from memory.
B. How do you challenge a corporate tax reassessment from abroad?
An audit usually starts quietly: a notice of verification (avis de vérification), months of document requests, then the decisive envelope, the proposal of rectification (proposition de rectification). This document is the whole case in writing, and the law forces the administration to make it usable. Article L. 57 of the Tax Procedure Book 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 same article adds: “Lorsque l’administration rejette les observations du contribuable sa réponse doit également être motivée.” And the regulatory detail follows in Article R*57-1 of the same book: “La proposition de rectification prévue par l’article L. 57 fait connaître au contribuable la nature et les motifs de la rectification envisagée.” In plain English: the proposal must state the nature and reasons of the planned correction so you can reply or accept, and any rejection of your reply must also be reasoned. A proposal that asserts figures without explaining how they were built, which year they belong to, and which legal basis supports them is vulnerable.
Time to reply is short and runs from receipt. Article L. 11 of the Tax Procedure Book fixes the default rule: “le délai accordé aux contribuables pour répondre aux demandes de renseignements, de justifications ou d’éclaircissements et, d’une manière générale, à toute notification émanant d’un agent de l’administration des impôts est fixé à trente jours à compter de la réception de cette notification.” The proposal itself invites observations within thirty days of receipt, extendable by thirty more on request made before expiry under Article L. 57. From abroad, this deadline is the one that kills files: the letter goes to the French registered office, nobody forwards it, and the thirty days expire. Designate a reliable recipient at the registered address, give your accountant and lawyer a standing instruction to open tax mail immediately, and request the extension in writing as soon as a complex file arrives. An extension asked late is an extension refused.
Courts enforce the motivation requirement strictly but not formalistically, and a 2026 judgment illustrates exactly what the administration must and must not do. On 16 April 2026 the Judicial Court of Versailles (No. RG 22/03267, official text on courdecassation.fr) recalled the governing principles: “L’article L57 du livre des procédures fiscales dispose que 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. Lorsque l’administration rejette les observations du contribuable sa réponse doit également être motivée.” The court then cited the Court of Cassation (notably Commercial Chamber, 27 November 2024, No. 23-10.622) for three clarifications: the administration must disclose only information and documents from third parties actually used to support the corrections, with enough precision to allow discussion of their origin; neither that text nor the duty of fairness requires handing over documents it did not use so the taxpayer can hunt for exculpatory material; and no separate list of relied-upon documents is required when they are identified inside the proposal itself (see also Commercial Chamber, 20 September 2023, No. 21-24.868). The taxpayers in Versailles lost because the proposal of 11 December 2012 did contain the material founding the decision. For your company the operational lesson is precise: attack a proposal for what it hides about documents actually used, demand copies of those third-party items before collection under Article L. 76 B, but do not waste the thirty days demanding the entire audit file.
After the reply stage, the path is staged and every stage can be handled from abroad through counsel. If the administration maintains the correction, it issues a confirmation, then a collection notice. You then file a formal claim (réclamation contentieuse) to the tax office, which must be lodged before 31 December of the second year following collection or the relevant event, with full reasoning and exhibits. Silence for six months equals implicit rejection, which opens the court door. Companies go to the administrative court (tribunal administratif) for IS disputes; the Marseille case above travelled exactly this route from the Marseille administrative court (judgment of 17 July 2025) to the appeal court in 2026. Representation by a French lawyer or qualified counsel is handled by mandate, hearings need not require your flight, and procedural acts arrive through your representative. Interest for late payment continues during the dispute unless a stay is granted against guarantees, so quantify the cost of fighting versus paying and claiming back.
Evidence wins these cases. Keep the five bundles that decide IS disputes: signed annual accounts and filing receipts for every year; bank statements proving instalment and balance payments with value dates; contracts and invoices supporting disputed charges, with proof of payment, not just issuance; transfer-pricing documentation if the French SAS deals with its foreign parent (invoices, contracts, margin analysis); and the complete audit correspondence in chronological order with proof of receipt dates. The territorial cases turn on the sixth bundle: leases, payroll records, travel logs, board minutes and server logs showing where activity was actually performed. The Gibraltar case was lost on exactly this ground because verification showed management and services run from France. A foreign founder who can show decisions minuted abroad, staff employed abroad, and French activity limited to what the treaty allocates elsewhere negotiates from strength; one who cannot should settle early rather than fund a losing appeal.
Conclusion
French corporate tax for a company run from abroad rests on four certainties. The French SAS or SARL is liable to IS on the profits of the business operated in France, at a normal rate of 25%, with losses carried forward under the million-plus-50% ceiling that must be tracked return by return. The return must be filed within three months of year-end, or by the second working day after 1 May for a December year-end, while cash leaves in instalments every 15 March, 15 June, 15 September and 15 December with a final settlement in the fourth month after closing, and the yearly CFE arrives on top regardless of profit. Every reassessment must be reasoned, every reply has thirty days, and courts check both, as Versailles in April 2026 and Nîmes in January 2025 demonstrate for motivation and territoriality, with Marseille in October 2026 showing how strictly the loss ceiling is computed. Organise the calendar, fund the professional tax account before each 15th, keep the six evidence bundles, and mandate someone in France to open the mail. Run this way, distance stops being a handicap: the rules are written, the deadlines are public, and the judge reads the file, not the passport.