Your French subsidiary has just received an avis de cotisation fonci\u00e8re des entreprises<\/em> \u2014 a local business tax bill you never budgeted for \u2014 or your accountant mentions a second instalment of CVAE<\/em> due on 15 September. For a founder based in London, New York or Dubai, these two French local taxes are usually invisible until the first notice arrives, and by then the deadlines are already running. The cotisation fonci\u00e8re des entreprises<\/strong> (CFE) is a property-based local tax charged on almost every business operating in France, including companies with no French-resident director. The cotisation sur la valeur ajout\u00e9e des entreprises<\/strong> (CVAE) is a second layer, charged on the value added produced by larger businesses. Together they form the contribution \u00e9conomique territoriale<\/strong> (CET), France’s local business tax, collected by the service des imp\u00f4ts des entreprises<\/em> (SIE), the local business tax office, on behalf of municipalities. Both are governed by the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/em> (CGI), the French tax code, and both follow strict calendars that a foreign founder cannot afford to discover late: a creation-year exemption that disappears the following year, a 50 per cent base reduction that applies only once, declaration duties triggered by crossing \u20ac152,500 of turnover, instalments on 15 June and 15 September, and a hard 31 December deadline to challenge any bill. This article sets out, first, what your company actually owes and how the amount is built (I), and second, the calendar, the reduction mechanisms and the challenge routes available when the bill looks wrong (II).<\/p>\n The CFE is due by virtually every business operating in France, whatever the nationality or residence of its shareholders and directors. Article 1447 of the CGI<\/a> provides that the contribution is due each year by individuals and legal entities \u00ab qui exercent \u00e0 titre habituel une activit\u00e9 professionnelle non salari\u00e9e \u00bb \u2014 who habitually carry on a non-salaried professional activity. A SAS, a SARL or the French branch of a foreign parent company falls squarely within that definition from the day it is registered. The fact that the sole director lives abroad, that the company banks outside France or that its contracts are signed remotely changes nothing: the tax attaches to the activity carried on in France and to the premises used to carry it on.<\/p>\n The taxable base is not turnover and not profit. It is the rental value (valeur locative cadastrale<\/em>) of the real property the company used for its activity during a reference period defined by article 1467 A of the CGI<\/a>: \u00ab l’avant-derni\u00e8re ann\u00e9e pr\u00e9c\u00e9dant celle de l’imposition ou le dernier exercice de douze mois clos au cours de cette m\u00eame ann\u00e9e \u00bb \u2014 the penultimate year before the tax year, or the last twelve-month financial year closed during that year. In plain terms, your 2026 CFE bill is built on the premises you occupied in 2024. This two-year lag constantly surprises foreign founders: a company that moved offices in 2025 will still be taxed in 2026 on the basis of its former, sometimes larger, premises, unless the change has been correctly declared.<\/p>\n Two reliefs soften the first years. Under article 1478 II of the CGI<\/a>, \u00ab en cas de cr\u00e9ation d’un \u00e9tablissement [\u2026] la cotisation fonci\u00e8re des entreprises n’est pas due pour l’ann\u00e9e de la cr\u00e9ation \u00bb \u2014 no CFE is due for the year in which the establishment is created \u2014 and \u00ab la base du nouvel exploitant est r\u00e9duite de moiti\u00e9 pour la premi\u00e8re ann\u00e9e d’imposition \u00bb, the base is cut by half for the first year of taxation. A French company incorporated in November 2025 therefore receives no CFE bill for 2025, pays on a halved base for 2026, and pays in full only from 2027 onwards. The same article adds a point foreign buyers should note: the CFE is due for the whole year by whoever carries on the activity on 1 January (\u00ab la cotisation fonci\u00e8re des entreprises est due pour l’ann\u00e9e enti\u00e8re par le redevable qui exerce l’activit\u00e9 le 1er janvier \u00bb). If you buy a French business on 2 January, the seller remains liable for the entire year’s CFE \u2014 a negotiation point for the share purchase agreement.<\/p>\n Where the company owns or rents no premises at all \u2014 the classic situation of a foreign founder using a domiciliation address or working from a coworking space \u2014 the CFE does not disappear. Article 1647 D of the CGI<\/a> subjects every taxpayer to a minimum contribution established at the place of the principal establishment, on a base set by the municipal council within statutory bands: between \u20ac250 and \u20ac597 where turnover is \u20ac10,000 or less, rising to between \u20ac250 and \u20ac7,769 where turnover exceeds \u20ac500,000. Only businesses with turnover of \u20ac5,000 or less are exempt from this minimum. The practical consequence for a foreign-owned SAS is that its first CFE bill will almost always be the municipal minimum, whose amount depends entirely on where the registered office sits. Paris, Lyon and the small municipalities of the Paris region apply very different rates and bases, so two otherwise identical companies can receive first bills of \u20ac300 or of \u20ac2,500.<\/p>\n The rate itself is voted each year by the municipality or the inter-municipal body (EPCI) where the establishment is located, and applied to the rental value or the minimum base. A tax for chamber of commerce costs is added on top. None of this is deductible from the analysis by reference to a national scale: the only way to anticipate the amount is to identify the SIE of the registered office and ask for an estimate, or to check the previous occupant’s bills when taking over premises.<\/p>\n The CVAE is the second component of the CET, and the one foreign founders most often miss because it is driven by turnover thresholds rather than by premises. Under article 1586 ter of the CGI<\/a>, individuals and legal entities carrying on an activity within the CFE scope \u00ab dont le chiffre d’affaires est sup\u00e9rieur \u00e0 152 500 \u20ac sont soumises \u00e0 la cotisation sur la valeur ajout\u00e9e des entreprises \u00bb \u2014 are subject to the CVAE. This is first and foremost a declaration<\/em> obligation: crossing \u20ac152,500 of turnover obliges the company to declare its value added and its headcount every year, even where no tax is ultimately paid.<\/p>\n The payment threshold is higher. Article 1586 quater of the CGI<\/a> sets the rate scale: \u00ab pour les entreprises dont le chiffre d’affaires est inf\u00e9rieur \u00e0 500 000 \u20ac, le taux est nul \u00bb \u2014 the rate is zero below \u20ac500,000 of turnover. Between \u20ac500,000 and \u20ac3 million, the rate rises progressively according to the statutory formula \u00ab 0,094 % \u00d7 (montant du chiffre d’affaires-500 000 \u20ac)\/2 500 000 \u20ac \u00bb, reaching a maximum of 0.28 per cent of value added for companies above \u20ac50 million. A \u20ac188 relief (\u00ab d\u00e9gr\u00e8vement de 188 \u20ac \u00bb) applies to companies below \u20ac2 million of turnover. Two aggregation rules matter for foreign groups: where a company belongs to a group within the meaning of article 223 A of the CGI, the turnover of group members is added together to test the thresholds (article 1586 quater I bis), so a modest French subsidiary of a large foreign group can be dragged into CVAE liability by its parent’s scale; and the value added on which the rate is applied is a fiscal aggregate capped at 80 or 85 per cent of turnover, defined by article 1586 sexies of the same code.<\/p>\n The CVAE was supposed to disappear. Successive finance acts scheduled its abolition, first for 2027, but the 2025 Finance Act postponed the repeal, and the 2026 Finance Act confirmed the existing rates without change: the CVAE remains fully due in 2026 and 2027, is then phased down, and disappears only for taxes assessed from 2030. Foreign founders reading older blog posts announcing the end of the CVAE should disregard them \u2014 the tax is alive, and the French tax authority continues to assess instalments on it. The official trajectory is reflected in the tax authority’s own administrative doctrine on the CET cap (BOI-IF-CFE-40-30-20-30), which applies the 1.531 per cent ceiling rate for 2026 and 2027 precisely because the CVAE remains in force at those dates.<\/p>\n Concretely, for a foreign-owned company in its first profitable years, the sequence is usually the following: no CVAE at all in year one and two while turnover stays below \u20ac152,500; a declaration duty from the year turnover crosses \u20ac152,500, with nothing to pay below \u20ac500,000; and real cash cost once turnover approaches \u20ac500,000, with two instalments the following year. A SAS distributing consulting services and growing quickly can cross all three steps within thirty months, which is why the CVAE must be built into the French subsidiary’s budget from the first business plan, alongside corporate income tax and the VAT registration obligations<\/a> that arise at the same growth stage.<\/p>\n The CFE calendar starts with a declaration most foreign founders never hear about. Article 1477 of the CGI<\/a> requires taxpayers to declare the elements used to establish the CFE. Where an establishment is created or an operator or activity changes during the year, \u00ab une d\u00e9claration provisoire doit \u00eatre fournie avant le 1er janvier de l’ann\u00e9e suivant celle de la cr\u00e9ation ou du changement \u00bb \u2014 a provisional return (form 1447-C-SD, now filed online) must be filed before 1 January of the year following the creation or change. The same article sets the general rule: elements must be declared \u00ab au plus tard le deuxi\u00e8me jour ouvr\u00e9 suivant le 1er mai \u00bb \u2014 no later than the second working day following 1 May \u2014 of the year preceding the taxation year. In practice this initial return is the document on which the SIE will compute the first halved base; a company that never files it exposes itself to ex officio taxation and loses control of the rental value used against it.<\/p>\n Payment of the CFE itself is made once a year, in mid-December, exclusively online for companies: the notice no longer arrives by post for professionals, it is issued in the company’s professional account on impots.gouv.fr. A company whose previous year’s CFE exceeded \u20ac3,000 must also pay a provisional instalment in June. Because the bill is only visible online, a foreign-owned company that has not activated its professional tax account \u2014 or whose notices are sent to the wrong address<\/a> \u2014 can discover the debt only when a recovery letter arrives, with late-payment interest already running.<\/p>\n The CVAE follows its own rhythm for companies above the \u20ac500,000 payment threshold. When the CVAE paid for the previous year exceeded \u20ac1,500, the company must pay two instalments, on 15 June and 15 September of the tax year, each equal to 50 per cent of the previous year’s amount, and then settle the balance in May of the following year when filing the liquidation return (form 1329-DEF). The annual declaration of value added and headcount (form 1330-CVAE) travels with the corporate tax return filed in May \u2014 the same season as the annual accounts filing with the greffe<\/a> and the corporate income tax instalments<\/a>, which makes April and May the densest compliance window of the French corporate year. Every one of these steps \u2014 declarations, instalments, balance \u2014 is dematerialised: no paper, no exceptions for companies managed from abroad.<\/p>\n For a foreign founder, the practical calendar therefore looks like this: before 1 January of year two, file the 1447-C-SD return; in May, file the 1330-CVAE with the tax return if turnover exceeded \u20ac152,500; on 15 June and 15 September, pay the CVAE instalments if the previous CVAE exceeded \u20ac1,500; in mid-December, pay the CFE; and at any point, check the professional account on impots.gouv.fr rather than waiting for the post. Building these dates into the group’s central finance calendar, next to the corporate income tax deadlines of the branch or subsidiary<\/a>, is the only reliable protection, because French local tax deadlines are not suspended by the taxpayer’s absence from France.<\/p>\n The first reduction route is not a challenge but a cap. Article 1647 B sexies of the CGI caps the sum of CFE and CVAE at a percentage of the value added produced by the company, and the tax authority’s published doctrine (BOI-IF-CFE-40-30-20-30)<\/a> confirms the rate at 1.531 per cent for taxes assessed in 2026 and 2027, before it steps down to 1.438 per cent in 2028, 1.344 per cent in 2029 and 1.25 per cent from 2030, when the cap will apply to the CFE alone. The relief \u2014 a d\u00e9gr\u00e8vement<\/em> \u2014 is never automatic: it must be claimed with form 1327-CET within the general claim deadline, and it is credited against the CFE, without ever reducing the contribution below the municipal minimum. This mechanism typically benefits industrial or logistics companies whose premises carry heavy rental values relative to thin margins, but it is also relevant for a foreign group’s French warehouse or showroom. The doctrine is explicit: \u00ab le d\u00e9gr\u00e8vement est accord\u00e9 sur r\u00e9clamation \u00bb \u2014 relief is granted only on claim.<\/p>\n Every other challenge follows the general contentious procedure of the Livre des proc\u00e9dures fiscales<\/em> (LPF), the code governing tax procedure. Under article R*190-1 of the LPF<\/a>, \u00ab le contribuable qui d\u00e9sire contester tout ou partie d’un imp\u00f4t qui le concerne doit d’abord adresser une r\u00e9clamation au service territorial [\u2026] dont d\u00e9pend le lieu de l’imposition \u00bb \u2014 the taxpayer must first file a claim with the tax office of the place of taxation. This prior administrative claim is mandatory: going straight to court without it renders the action inadmissible. The deadline is fixed by article R*196-2 of the LPF<\/a>: claims relating to local direct taxes \u00ab doivent \u00eatre pr\u00e9sent\u00e9es \u00e0 l’administration des imp\u00f4ts au plus tard le 31 d\u00e9cembre de l’ann\u00e9e suivant \u00bb the year in which the assessment roll was issued, the collection notice notified or the payment made. For a 2026 CFE notice issued in the autumn of 2026, the claim deadline therefore expires on 31 December 2027. The comfortable delay should not induce procrastination: the claim suspends nothing by itself, and the tax remains payable unless a deferral of payment is requested and guaranteed.<\/p>\n Which errors are actually worth a claim? Experience with foreign-owned companies points to a recurring list. The rental value includes premises the company vacated more than two years ago, because the move was never declared under article 1477. The bill is established at the registered office although the actual establishment \u2014 and the competent SIE \u2014 is elsewhere. The halved base of the first taxation year under article 1478 II was ignored. The municipal minimum base was applied although premises do exist, or applied on a turnover band above the real one. The CVAE was computed without the group aggregation being checked, or without the \u20ac188 relief below \u20ac2 million. Each of these errors is correctable through the R*190-1 claim, supported by the lease, the exit inventory or the group chart, and each disappears if the 31 December deadline is missed.<\/p>\n Two habits close the loop. First, keep the 1447-C-SD return under version control like a contract: every office move, sublease or change of activity must trigger an updated declaration, because the reference period of article 1467 A makes today’s declaration the basis of the bill two years from now. Second, reconcile each autumn notice against the statutory markers before paying: creation-year exemption, halved first base, correct turnover band for the minimum, CVAE instalments consistent with the previous year’s liquidation. A company that performs this fifteen-minute review each year will either pay the right amount or hold the material for a well-founded claim \u2014 and will never again be surprised by the envelope from the SIE.<\/p>\n The CFE and the CVAE are not optional surprises of French business life: they are statutory local taxes with a creation-year exemption, a halved first base, a municipal minimum, turnover thresholds at \u20ac152,500 and \u20ac500,000, instalments in June and September, payment in December, and a hard 31 December deadline to challenge. For a foreign-owned company, the winning strategy is administrative, not heroic: file the 1447-C-SD before 1 January of the second year, activate and monitor the professional account on impots.gouv.fr, budget the CVAE as turnover approaches \u20ac500,000, test the CET cap when the premises weigh on the bill, and claim through the LPF procedure as soon as an error is identified rather than when recovery starts. Handled this way, the CET becomes a predictable cost line of the French operation instead of an annual ambush.<\/p>\n Has your foreign-owned company received a CFE or CVAE bill that looks wrong, or are you setting up in France and want the local tax calendar built correctly from day one? Our firm answers within 48 hours, by phone, with a lawyer who handles these declarations, caps and claims for international founders every week.<\/p>\n Call us on +33 6 46 60 58 22<\/a> (Ma\u00eetre Reda Kohen) or send us your situation through our contact form<\/a>. We will tell you what to file, what to contest, and before which deadline.<\/p>\n","protected":false},"excerpt":{"rendered":" CFE and CVAE in France: the local business taxes a foreign-owned company owes \u2014 creation-year exemption, \u20ac152,500 and \u20ac500,000 thresholds, instalments on 15 June and 15 September, the CET cap and the 31 December claim deadline.<\/p>\n","protected":false},"author":251031309,"featured_media":16545,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kj_source_type":"","_kj_official_id":"","_kj_official_url":"","_kj_judilibre_id":"","_kj_jur":"","_kj_lieu":"","_kj_chambre":"","_kj_rg":"","_kj_date":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"federated","footnotes":""},"categories":[80314,80313],"tags":[],"class_list":["post-2116975","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-decryptage","category-doing-business-in-france"],"yoast_head":"\nI. What the CFE and the CVAE actually charge a foreign-owned company<\/h2>\n
A. The CFE: a property-based local tax that starts with the creation-year exemption and ends with the municipal minimum<\/h3>\n
B. The CVAE: the value-added layer above \u20ac152,500 of turnover, with payment only above \u20ac500,000 and an abolition postponed to 2030<\/h3>\n
II. The calendar, the reductions and the routes to challenge a CFE or CVAE bill<\/h2>\n
A. Declarations and deadlines: the 1447-C-SD return, the May declaration, the June and September instalments and the December payment<\/h3>\n
B. Reducing and challenging the bill: the CET cap, the 31 December claim deadline and the errors worth correcting<\/h3>\n
Conclusion<\/h2>\n
Need a quick opinion on your case?<\/h2>\n