You have just received the Kbis for your French company \u2014 the official registration certificate issued through the commercial court registry, known in France as the greffe \u2014 and the bank account is finally open. The next question from every foreign founder arrives within days: how much French corporate tax will this company actually pay, when must the money leave the account, and what happens if you get a date or a figure wrong while running the business from London, New York, Dubai or Singapore? This guide answers those three questions in order, with the exact legal texts and court decisions behind each answer.<\/p>\n
France taxes the profits of your French company through the imp\u00f4t sur les soci\u00e9t\u00e9s, universally shortened to IS. The rules sit in the Code g\u00e9n\u00e9ral des imp\u00f4ts, the French tax code, usually shortened to CGI. Your day-to-day contact is the SIE, the service des imp\u00f4ts des entreprises, which is the local corporate tax office attached to the area of your registered office, and above it the DGFIP, the Direction g\u00e9n\u00e9rale des finances publiques, the national tax administration. Every French acronym used below is explained the first time it appears, so you can forward this article to a co-founder or a lender and everyone stays on the same page.<\/p>\n
Part I explains which profits France taxes, at what rate, and how quarterly instalments and the final balance work when the finance team sits abroad. Part II explains how to carry a loss forward, correct a return, and survive late filing, late payment and a tax audit, including the exact procedure for contesting a reassessment. A short Paris and \u00cele-de-France section is integrated into each part, because the competent office, the court and the practical delays depend on where your si\u00e8ge social, your registered office, is located.<\/p>\n
Once your company is registered, the starting point is simple. Article 206 of the tax code provides that, subject to narrow exceptions, the following “sont passibles de l’imp\u00f4t sur les soci\u00e9t\u00e9s, quel que soit leur objet, les soci\u00e9t\u00e9s anonymes, les soci\u00e9t\u00e9s en commandite par actions, les soci\u00e9t\u00e9s \u00e0 responsabilit\u00e9 limit\u00e9e n’ayant pas opt\u00e9 pour le r\u00e9gime fiscal des soci\u00e9t\u00e9s de personnes”, together with cooperatives and other legal entities carrying on profit-making operations: Article 206 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 companies liable to corporate tax<\/a>. In plain terms, a SAS, the soci\u00e9t\u00e9 par actions simplifi\u00e9e, the flexible joint-stock company almost every foreign founder chooses, and a SARL, the soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e, the quota-based limited liability company, both fall inside corporate tax by default from day one. You do not need a minimum turnover or a first profit for the regime to apply; the liability exists as soon as the company exists.<\/p>\n The taxable base is then defined by Article 38 of the same code: “Sous r\u00e9serve des dispositions des articles 33 ter , 40 \u00e0 43 bis et 151 sexies , le b\u00e9n\u00e9fice imposable est le b\u00e9n\u00e9fice net, d\u00e9termin\u00e9 d’apr\u00e8s les r\u00e9sultats d’ensemble des op\u00e9rations de toute nature effectu\u00e9es par les entreprises, y compris notamment les cessions d’\u00e9l\u00e9ments quelconques de l’actif, soit en cours, soit en fin d’exploitation”: Article 38 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 definition of taxable profit<\/a>. Every type of transaction counts, including sales of assets during the year or when the business stops. For a foreign shareholder this has a practical consequence that surprises many newcomers: selling equipment, assigning a lease right, or transferring shares held as assets can all feed the taxable result, not only the trading margin shown in management accounts.<\/p>\n The rate is set by Article 219: “Le taux normal de l’imp\u00f4t est fix\u00e9 \u00e0 25 %”: Article 219 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 25 percent standard corporate tax rate<\/a>. Budget 25 percent of the taxable profit as your baseline. Reduced rates exist for specific long-term gains and for certain innovation income, but a foreign founder should never assume they apply without a file-by-file analysis; the standard rate is the only safe planning assumption at entry stage.<\/p>\n France does not tax worldwide profit. Article 209 provides that only profits from enterprises operated in France are taken into account, alongside certain listed French-source income and profits attributed to France by a double-tax treaty: Article 209 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 territoriality and loss carry-forward<\/a>. If your group keeps a UK parent, a US LLC or a Dubai holding above the French company, each entity is taxed where it operates, and the treaty between France and that state decides the borderline cases such as dividends, interest and royalties. That territorial logic is also why the choice between a subsidiary and a branch matters so much: a subsidiary is a separate French person for tax purposes, while a branch, called a succursale, is only an extension of the foreign company and raises permanent-establishment questions from the first invoice. If you have not yet chosen your vehicle, read our pillar guide first: Setting up a company in France as a foreign founder: bank account, Kbis, VAT and first hire<\/a>.<\/p>\n Deducting costs is where foreign-owned companies most often lose money in audits. The Conseil d’\u00c9tat, the highest administrative court, recalls the two-step rule that every founder with intragroup invoices must understand: “En vertu des dispositions combin\u00e9es des articles 38 et 209 du code g\u00e9n\u00e9ral des imp\u00f4ts, le b\u00e9n\u00e9fice imposable \u00e0 l’imp\u00f4t sur les soci\u00e9t\u00e9s est celui qui provient des op\u00e9rations de toute nature faites par l’entreprise, \u00e0 l’exception de celles qui, en raison de leur objet ou de leurs modalit\u00e9s, sont \u00e9trang\u00e8res \u00e0 une gestion normale. Constitue un acte anormal de gestion l’acte par lequel une entreprise d\u00e9cide de s’appauvrir \u00e0 des fins \u00e9trang\u00e8res \u00e0 son int\u00e9r\u00eat”: Conseil d’\u00c9tat, 26 April 2024, no. 458958, Kyowa \u2014 abnormal management and deductible charges<\/a>. An acte anormal de gestion, an abnormal management act, is any decision by which the company impoverishes itself for purposes foreign to its own interest. The same decision places the first burden on the company: “Il appartient au contribuable, pour l’application des dispositions de l’article 39 du code g\u00e9n\u00e9ral des imp\u00f4ts, de justifier tant du montant des charges qu’il entend d\u00e9duire du b\u00e9n\u00e9fice net d\u00e9fini \u00e0 l’article 38 du code g\u00e9n\u00e9ral des imp\u00f4ts que de la correction de leur inscription en comptabilit\u00e9, c’est-\u00e0-dire du principe m\u00eame de leur d\u00e9ductibilit\u00e9.” You must therefore prove the amount of each charge, its correct booking, and the reality and value of what the company received in return, before the administration has to prove anything.<\/p>\n That burden bites hardest on cross-border charges. Article 57 of the tax code targets profits indirectly transferred abroad through inflated or understated purchase or sale prices, or by any other means, between companies under common dependence or control: “Pour l’\u00e9tablissement de l’imp\u00f4t sur le revenu d\u00fb par les entreprises qui sont sous la d\u00e9pendance ou qui poss\u00e8dent le contr\u00f4le d’entreprises situ\u00e9es hors de France, les b\u00e9n\u00e9fices indirectement transf\u00e9r\u00e9s \u00e0 ces derni\u00e8res, soit par voie de majoration ou de diminution des prix d’achat ou de vente, soit par tout autre moyen, sont incorpor\u00e9s aux r\u00e9sultats accus\u00e9s par les comptabilit\u00e9s”: Article 57 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 indirect transfers of profits abroad<\/a>. Management fees invoiced by the foreign parent, a seconded president rebilled at cost-plus, or a group loan at an unusual rate all sit in this danger zone. The Kyowa case itself concerned a Japanese parent seconding employees to chair its French subsidiary and rebilling their pay: the court accepted the deduction only because the seconded staff had worked exclusively for the French company, had actually run it, and the amounts were not excessive. Keep contemporaneous proof \u2014 contract, time records, invoices, evidence of services actually received \u2014 or the charge is reintegrated and taxed at 25 percent plus penalties.<\/p>\n A second decision shows the mirror image. A consultancy that routed funds through its manager’s personal brokerage account for high-risk contracts for difference, then booked the transfers as company charges, lost its deduction because it could not prove the company had kept ownership of the funds or acted through a mandate, and its books did not faithfully record the flows. The court recalled that “il r\u00e9sulte de l’article 39 du code g\u00e9n\u00e9ral des imp\u00f4ts, dont les dispositions sont applicables \u00e0 l’imp\u00f4t sur les soci\u00e9t\u00e9s en vertu de l’article 209 du m\u00eame code, que le b\u00e9n\u00e9fice net est \u00e9tabli sous d\u00e9duction de toutes charges”, but only charges that are genuinely the company’s, properly documented and properly booked: Conseil d’\u00c9tat, 24 July 2019, no. 418330, Patrimmo Conseils \u2014 burden of proof for deductible charges<\/a>. For a founder abroad, the lesson is concrete: never mix personal and company money, never run company trades through a personal account, and make the French books reflect every movement exactly.<\/p>\n French corporate tax is not paid once a year. Article 1668 of the tax code provides: “L’imp\u00f4t sur les soci\u00e9t\u00e9s donne lieu au versement, au comptable public comp\u00e9tent, d’acomptes trimestriels d\u00e9termin\u00e9s \u00e0 partir des r\u00e9sultats du dernier exercice clos”: Article 1668 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 quarterly corporate tax instalments<\/a>. Four acomptes, quarterly instalments, are computed from the last closed financial year and paid to the competent public accountant during the current year, with the first instalments falling early in the calendar year \u2014 the statute fixes the first payment dates on 15 March and 15 June, followed by two further quarterly payments. Each instalment is a fraction of the tax computed on the prior year’s results, so a profitable year automatically raises next year’s cash rhythm even before the current result is known.<\/p>\n There is one welcome exception for newcomers. The same article states: “Les soci\u00e9t\u00e9s nouvellement cr\u00e9\u00e9es ou nouvellement soumises, de plein droit ou sur option, \u00e0 l’imp\u00f4t sur les soci\u00e9t\u00e9s sont dispens\u00e9es du versement d’acomptes au cours de leur premier exercice d’activit\u00e9 ou de leur premi\u00e8re p\u00e9riode d’imposition arr\u00eat\u00e9e conform\u00e9ment au deuxi\u00e8me alin\u00e9a du I de l’article 209 .” (Article 1668 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 first-year instalment exemption<\/a>) Your first financial year therefore runs without instalments; the full tax for that year is settled as a balance once the result is known. From the second year on, the quarterly rhythm applies, and founders who had a strong first year must provision cash from January even though the return is filed months later.<\/p>\n The return itself follows Article 223: “la d\u00e9claration du b\u00e9n\u00e9fice ou du d\u00e9ficit est faite dans les trois mois de la cl\u00f4ture de l’exercice. Si l’exercice est clos le 31 d\u00e9cembre ou si aucun exercice n’est clos au cours d’une ann\u00e9e, la d\u00e9claration est \u00e0 d\u00e9poser au plus tard le deuxi\u00e8me jour ouvr\u00e9 suivant le 1er mai”: Article 223 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 corporate tax return deadline<\/a>. For the classic 31 December year-end, the liasse fiscale, the full tax return bundle including financial statements and annexes, must therefore be filed at the very start of May, and it must list the amounts the company asks to set against its liability. The balance of tax, the solde, follows the return: instalments already paid are credited and the remainder is due shortly after filing. Miss the return and you miss the balance \u2014 which is exactly how the filing penalties described in Part II are triggered.<\/p>\n Everything is done online, and that is good news for a director abroad. Returns are filed electronically and payments are made by bank transfer through the company’s Espace professionnel, the professional account on the tax administration’s website, or through the EDI-TDFC channel used by your expert-comptable, the French chartered accountant. A SEPA transfer from a French business account works; a transfer ordered from a foreign account of the company is accepted as long as it reaches the right accountant’s office with the right references, so keep the SIE payment references exactly as issued. Give your accountant a mandate and a calendar alert for each quarterly date, because the French system sends few reminders and excuses no delay for the excuse that the director was travelling.<\/p>\n Paris and \u00cele-de-France practice adds three concrete points. First, the competent SIE is determined by the si\u00e8ge social: a company registered in Paris pays to the Paris SIE network, while one in Hauts-de-Seine, Seine-Saint-Denis or Val-de-Marne pays to the SIE of its d\u00e9partement, all coordinated by the regional directorate. Choose the registered address with this in mind, because moving the si\u00e8ge later means changing tax office mid-year. Second, Paris accountants close dozens of foreign-owned files in the same April week, so instruct your expert-comptable in February, not in April, and deliver English-language source documents with a French summary to avoid booking errors. Third, if the company has Paris commercial premises, the same calendar brings parallel local deadlines handled by different offices; keep corporate tax, VAT and local business levies on one consolidated calendar rather than three separate ones.<\/p>\n A loss-making first year is normal for a market-entry subsidiary, and French law treats the deficit as an asset rather than a dead end. Article 209 provides: “Sous r\u00e9serve de l’option pr\u00e9vue \u00e0 l’article 220 quinquies , en cas de d\u00e9ficit subi pendant un exercice, ce d\u00e9ficit est consid\u00e9r\u00e9 comme une charge de l’exercice suivant et d\u00e9duit du b\u00e9n\u00e9fice r\u00e9alis\u00e9 pendant ledit exercice dans la limite d’un montant de 1 000 000 \u20ac major\u00e9 de 50 % du montant correspondant au b\u00e9n\u00e9fice imposable dudit exercice exc\u00e9dant ce premier montant. Si ce b\u00e9n\u00e9fice n’est pas suffisant pour que la d\u00e9duction puisse \u00eatre int\u00e9gralement op\u00e9r\u00e9e, l’exc\u00e9dent du d\u00e9ficit est report\u00e9 dans les m\u00eames conditions sur les exercices suivants”: Article 209 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 indefinite carry-forward of losses<\/a>. Concretely, next year’s profit absorbs last year’s loss up to one million euros in full, plus half of any profit above that million, and whatever cannot be absorbed is carried forward again on the same terms, year after year, with no time limit. A French subsidiary that loses 800,000 euros in year one and earns 500,000 euros in year two therefore pays tax on nothing in year two, and keeps the remaining shelter for later. Track the stock of carry-forward losses in every return, because a forgotten line in the liasse is a forgotten asset.<\/p>\n Losses also change behaviour in groups. A profitable French sister company cannot automatically use another company’s loss outside a formal tax-consolidation regime, and transferring losses through artificial invoicing falls straight back under Article 57 on indirect transfers and the abnormal-management case law of Part I. If the parent must fund the loss-making subsidiary, a documented capital increase or a written shareholder loan with arm’s-length interest, actually paid and properly booked, survives audits far better than vague year-end management fees designed to move the loss where the group prefers. The Patrimmo lesson applies again: the company must show the funds stayed the company’s, the mandate existed, and the books recorded each movement faithfully.<\/p>\n When the return itself contains an error, correct it before the administration finds it. A company that understated profit or overstated a charge may file a d\u00e9claration rectificative, a corrective return, replacing the figures for the year concerned; the correction generates either an additional payment or a repayment claim, and it almost always costs less than the same correction imposed after an audit. Keep every supporting document \u2014 supplier invoices, bank statements, loan agreements, transfer-pricing memo, board minutes approving the accounts \u2014 for the full retention period, because the auditor will ask for the paper behind each material line, and the Kyowa burden of proof means the company speaks first with documents, not with explanations.<\/p>\n Founders abroad should build a simple yearly routine. Approve the annual accounts within six months of year-end at a shareholders’ decision that can be signed remotely if the articles allow it. File the liasse at the start of May for a December year-end. Reconcile the four instalments against the final liability and diary the refund or the balance. Update the loss schedule. And keep a single bilingual file \u2014 contract, invoice, proof of payment, proof of service \u2014 behind every intragroup charge above a materiality threshold your accountant sets. Paris-based accountants for foreign groups run exactly this checklist each spring; ask yours to confirm in writing that each step is done, because an email trail is itself evidence of diligent management if a penalty is later discussed.<\/p>\n Missing the return deadline is the most expensive clerical error in this guide. Article 1728 of the tax code states: “Le d\u00e9faut de production dans les d\u00e9lais prescrits d’une d\u00e9claration ou d’un acte comportant l’indication d’\u00e9l\u00e9ments \u00e0 retenir pour l’assiette ou la liquidation de l’imp\u00f4t entra\u00eene l’application, sur le montant des droits mis \u00e0 la charge du contribuable ou r\u00e9sultant de la d\u00e9claration ou de l’acte d\u00e9pos\u00e9 tardivement, d’une majoration de : a. 10 % en l’absence de mise en demeure ou en cas de d\u00e9p\u00f4t de la d\u00e9claration ou de l’acte dans les trente jours suivant la r\u00e9ception d’une mise en demeure d’avoir \u00e0 le produire dans ce d\u00e9lai ; b. 40 % lorsque la d\u00e9claration ou l’acte n’a pas \u00e9t\u00e9 d\u00e9pos\u00e9 dans les trente jours suivant la r\u00e9ception d’une mise en demeure d’avoir \u00e0 le produire dans ce d\u00e9lai ; c. 80 % en cas de d\u00e9couverte d’une activit\u00e9 occulte”: Article 1728 of the Code g\u00e9n\u00e9ral des imp\u00f4ts \u2014 surcharges for late or missing returns<\/a>. File late on your own initiative and 10 percent is added to the tax due. Ignore the formal demand letter, the mise en demeure, for more than thirty days and the surcharge jumps to 40 percent. Run a hidden activity and it reaches 80 percent. These surcharges apply to the duties themselves, so on a 100,000-euro liability a spontaneous late return costs an extra 10,000 euros before any further sanction \u2014 a margin no market-entry budget should absorb.<\/p>\n Late payment of amounts already assessed follows its own surcharge track, and the same discipline applies: diary every due date, pay by transfer with exact references, and never net off a disputed amount against an undisputed one without advice. If cash is short, ask the SIE for a payment plan before the deadline rather than defaulting silently; a reasoned request with accounts and a timetable preserves goodwill and, in practice, keeps the file out of the penalty track while it is examined. Silence, by contrast, is read as neglect and priced accordingly.<\/p>\n When the administration disagrees with your return, the procedure is heavily formalised, and that formalism protects a foreign company that answers properly. The standard route is a v\u00e9rification de comptabilit\u00e9, an on-site or desk audit of the accounts, ending, where adjustments are proposed, in a proposition de rectification, a reasoned proposed reassessment. Article L. 57 of the Livre des proc\u00e9dures fiscales, the procedural tax code, provides: “L’administration adresse au contribuable une proposition de rectification qui doit \u00eatre motiv\u00e9e de mani\u00e8re \u00e0 lui permettre de formuler ses observations ou de faire conna\u00eetre son acceptation. Sur demande du contribuable re\u00e7ue par l’administration avant l’expiration du d\u00e9lai mentionn\u00e9 \u00e0 l’article L. 11 , ce d\u00e9lai est prorog\u00e9 de trente jours”: Article L. 57 of the Livre des proc\u00e9dures fiscales \u2014 reasoned proposed reassessment and extended reply time<\/a>. You therefore receive a motivated letter, you have a statutory period to reply with observations or acceptance, and you can obtain a thirty-day extension simply by asking before the first deadline expires. Use that extension every time: it buys the weeks needed to gather English-language evidence, have it summarised in French, and let your accountant and lawyer align the technical and legal lines.<\/p>\n Answering well means answering like the Kyowa winner, not like the Patrimmo loser. Produce the contract behind each disputed charge, the invoice, the proof of payment from the company account, and the proof that the service was actually rendered to the French company \u2014 meeting notes, deliverables, time sheets, access logs. Explain the price method for intragroup services in one page: cost base, margin, comparables or group policy reference. Show the bookkeeping entries and their dates. Where the administration asserts an abnormal management act or an Article 57 transfer, force the debate onto facts the file supports: exclusive work for the French company, real direction exercised, amounts consistent with the service. General statements about group synergies do not move an auditor; dated deliverables do.<\/p>\n If the reassessment is maintained, the remedies run in stages and each stage has its own clock. File a r\u00e9clamation, an administrative claim, to the tax office, then, on express or implied rejection, appeal to the tribunal administratif, the administrative court of the area of the registered office \u2014 for a Paris si\u00e8ge, the Paris administrative court; elsewhere in the region, the court of the d\u00e9partement concerned. Further appeal lies to the cour administrative d’appel and, on points of law, to the Conseil d’\u00c9tat, whose decisions quoted in this guide show how strictly the burden of documentary proof is applied. Never let a deadline pass while negotiating informally: lodge the protective claim or appeal first, then continue talking. And never invent a document to plug a gap; a missing proof loses a charge, while a false proof loses the whole file and exposes the manager personally.<\/p>\n For Paris and \u00cele-de-France companies, three practical notes close this part. First, audits of foreign-owned Paris companies are routinely handled in French by correspondence and portal messages, with short reply windows; appoint a Paris-based correspondant \u2014 accountant or lawyer \u2014 empowered to receive and diary every letter the week it arrives. Second, shareholder meetings, board minutes and powers of attorney signed abroad are accepted if the articles allow remote decisions, but signatures, dates and certified translations must be beyond reproach, because auditors test governance documents first when intragroup charges are at stake. Third, keep the BODACC, the Bulletin officiel des annonces civiles et commerciales, the official gazette publishing company registrations and insolvency notices, and the commercial court greffe filings consistent with the tax file: a registered office, manager or capital figure that differs between the Kbis extract and the tax return invites the very questions this guide teaches you to avoid.<\/p>\n French corporate tax for a foreign-owned company reduces to a short discipline. Article 206 puts your SAS or SARL inside the tax, Article 38 defines a broad profit base, and Article 219 taxes it at 25 percent on French-source operations identified with the help of Article 209 and your double-tax treaty. Article 1668 spreads payment across four quarterly instalments computed on last year’s result, with a first-year exemption for new companies, and Article 223 fixes the return \u2014 and therefore the balance \u2014 in the three months after year-end, at the start of May for a December close. Article 209 turns losses into a forward shelter capped at one million euros plus half the excess profit, renewable indefinitely. Article 1728 prices late filing at 10, 40 or 80 percent, and Article L. 57 guarantees a motivated reassessment proposal with an extendable reply period when the administration challenges your figures. Behind every charge, the Kyowa and Patrimmo decisions put the documentary burden on the company first. Master the calendar, document every intragroup euro, correct errors before the audit, and contest in time and in French with evidence \u2014 and the French tax system becomes predictable rather than frightening.<\/p>\n Our firm advises foreign founders and groups on French corporate tax, instalments, loss strategy and tax audits. Call +33 6 46 60 58 22<\/a> for a telephone consultation within 48 hours with a lawyer of the firm, including for companies based in Paris and \u00cele-de-France. You can also reach us through our contact page: contact the firm through the online form<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Foreign owner of a French SAS or SARL? The 25 percent corporate tax, quarterly instalments, filing deadlines, loss carry-forward and penalties explained, with the official texts and court decisions behind each answer.<\/p>\n","protected":false},"author":251031309,"featured_media":16558,"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-2122865","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-decryptage","category-doing-business-in-france"],"yoast_head":"\nB. How quarterly instalments and the final balance work when you run the company from abroad<\/h3>\n
II. How do you carry losses, fix errors and survive penalties or a tax audit?<\/h2>\n
A. How to carry a French loss forward and correct a return without panic<\/h3>\n
B. What late filing and late payment really cost and how to contest a reassessment from abroad<\/h3>\n
Conclusion<\/h2>\n
Need a quick opinion on your case<\/h2>\n