You formed your French company from London, New York or Dubai, the Kbis (the official certificate proving that your company is registered with the French commercial court registry, the greffe) arrived in your inbox, and the first year of trading went better, or worse, than expected. Then a new line appears on your accountant’s schedule: corporation tax, in French impot sur les societes, universally shortened to IS. Unlike income tax, French corporation tax is not collected in one annual bill. Your company pays it itself, in advance, in four quarterly instalments called acomptes, and settles the exact amount months after the financial year ends through a final statement called the releve de solde. Miss an instalment, miscalculate the balance, or ignore a loss-making year, and the cost arrives automatically: a 5 percent surcharge plus monthly late interest, applied by software before any human being looks at your file. This article explains, for a founder or finance director who does not live in France, how the instalment calendar works, when you are allowed to reduce or stop paying instalments, what happens to tax losses, and what late payment really costs. The machinery is described step by step so that you can instruct your French accountant precisely, set calendar reminders in your own time zone, and understand the letters arriving from the SIE, the service des impots des entreprises, the local corporate tax office that handles your company’s file.<\/p>\n
If you are still at the incorporation stage, start with our companion guide on setting up a company in France as a foreign founder, from the corporate bank account to the Kbis, VAT registration and the first hire<\/a>, which explains the registrations that must exist before any tax payment can even be made. The present article takes over where that guide stops: the company exists, it trades, and the French tax administration, the DGFIP (direction generale des finances publiques), expects its money on French dates, in euros, through French online channels, whether or not you are physically present.<\/p>\n French corporation tax is a self-assessed tax. Article 1668<\/a> of the CGI, the code general des impots (the general tax code), provides that companies pay the tax spontaneously, in four instalments computed from the results of the last closed financial year. The administration states the rule plainly on its official website: during a financial year, companies liable for corporation tax must pay four instalments and regularise their position no later than the 15th day of the fourth month following the end of the financial year, on the IS balance statement, form number 2572-SD. The statutory payment dates are fixed by the code itself: “Les paiements doivent \u00eatre effectu\u00e9s au plus tard les 15 mars, 15 juin, 15 septembre et 15 d\u00e9cembre de chaque ann\u00e9e.” In English: payments must be made no later than 15 March, 15 June, 15 September and 15 December of each year. These dates do not move because you live abroad, because your accountant is on holiday, or because you never received a reminder. There is no prior tax bill, no avis d’imposition to wait for. Your company computes each instalment itself and pays it to the competent public accountant, which in practice means paying online through the company’s espace professionnel, the professional account on impots.gouv.fr, by SEPA direct debit or bank transfer from a bank account that accepts SEPA debits in euros.<\/p>\n Each instalment is in principle equal to one quarter of the corporation tax computed on the profit of the most recent closed financial year, at the rates in force. Since financial years for which the normal rate applies, article 219<\/a> of the CGI provides that “Le taux normal de l’imp\u00f4t est fix\u00e9 \u00e0 25 %.” In English: the standard rate of the tax is set at 25 percent. A reduced rate and separate taxation rules exist for certain long-term capital gains and for specific categories of profit, but for an ordinary trading SAS (societe par actions simplifiee, the flexible limited company most foreign founders choose) or SARL (societe a responsabilite limitee, the traditional private limited company), the working assumption is 25 percent of taxable profit, so each instalment is roughly one quarter of last year’s tax. Two refinements matter in practice. First, the first instalment of a financial year is normally computed provisionally from the profit of the year before last, because the last year’s results are not yet declared in March, and it is then regularised when the second instalment is paid on the basis of the last closed year. Second, companies created recently, or newly subject to corporation tax by law or by election, are exempt from paying instalments during their first year of activity or their first tax period. That first-year exemption is written into article 1668 itself, and it is one of the few genuine breathing spaces the system offers: a company incorporated in 2026 with a first financial year ending on 31 December 2026 pays no instalments during 2026 and settles everything with the first balance statement.<\/p>\n The balance, called the solde, is where precision becomes compulsory. Article 1668<\/a> provides: “S’il r\u00e9sulte de cette liquidation un compl\u00e9ment d’imp\u00f4t, il est acquitt\u00e9 lors du d\u00e9p\u00f4t du relev\u00e9 de solde au plus tard le 15 du quatri\u00e8me mois qui suit la cl\u00f4ture de l’exercice. Si l’exercice est clos au 31 d\u00e9cembre ou si aucun exercice n’est clos en cours d’ann\u00e9e, le relev\u00e9 de solde est \u00e0 d\u00e9poser au plus tard le 15 mai de l’ann\u00e9e suivante.” In English: if the final computation shows additional tax due, it is paid when filing the balance statement, no later than the 15th day of the fourth month following the end of the financial year. If the year ends on 31 December, or if no year ends during the calendar year, the balance statement must be filed no later than 15 May of the following year. For the standard case, a company closing its accounts on 31 December 2026 files form 2572-SD and pays any remaining tax by 15 May 2027. The balance is filed together with the annual results return, the liasse fiscale, and the two must be consistent: the profit declared in the results return determines the final tax, and the final tax determines the balance. From abroad, the practical consequence is a hard annual deadline in mid-May that you should enter in your calendar the day the financial year closes, with a reminder six weeks earlier to chase your accountant for the draft computation.<\/p>\n The system also works in your favour when you have overpaid. If the final computation shows that the instalments paid exceed the tax due, Article 1668<\/a> provides that the excess, after deduction of other direct taxes owed by the company, is refunded within thirty days of the filing of the balance statement and the results return. In the words of the code: “Si la liquidation fait appara\u00eetre que les acomptes vers\u00e9s sont sup\u00e9rieurs \u00e0 l’imp\u00f4t d\u00fb, l’exc\u00e9dent, d\u00e9falcation faite des autres imp\u00f4ts directs dus par l’entreprise, est restitu\u00e9 dans les trente jours \u00e0 compter de la date de d\u00e9p\u00f4t du relev\u00e9 de solde et de la d\u00e9claration pr\u00e9vue au 1 de l’article 223.” In English: if the final computation shows that the instalments paid are higher than the tax due, the excess, after deducting other direct taxes owed by the company, is refunded within thirty days from the filing date of the balance statement and the return. For a foreign-based owner, two details matter here. The refund is paid to the bank account registered in the company’s espace professionnel, so keep those bank details current, especially if you changed banks after the painful process of opening a French corporate account. And the thirty-day clock runs from filing, so a late-filed balance statement delays your own refund, a cost that never appears in any penalty notice but is entirely real.<\/p>\n Paying from outside France adds a layer of logistics that French-resident directors never think about. Instalments and the balance must be paid electronically; paper cheques drawn on foreign banks are not a workable method. If your French company has no French bank account that supports SEPA direct debits, arrange payment by SEPA transfer in euros well before the 15th, because a transfer initiated on the 14th from a non-eurozone bank can arrive late, and lateness is measured by the credit date on the Treasury account, not by the date you clicked. Give at least one trusted person, your accountant or a director with access, the credentials and authority to file and pay through the espace professionnel, and make sure the SIE has your current correspondence address, because formal notices, including the mise en demeure (formal demand) that doubles certain penalties, are sent to the registered office, the siege social, and time starts running on receipt. Companies domiciled in Paris and Ile-de-France deal with some of the largest SIE offices in the country, which process files quickly but also issue automated reminders quickly; distance is no defence, and the Paris SIE will not telephone London or New York before applying a surcharge.<\/p>\n Yes, but only within the rules, and the margin for error is narrow. The tax administration expressly allows modulation, meaning adjusting instalments up or down during the year to reflect the tax you actually expect to owe. Its official guidance explains that because a company’s activity and therefore its tax evolve from one year to the next, you may modulate the instalments claimed from you, upwards or downwards, according to the corporation tax you think you will owe at the end of the year. Concretely, if you expect the profit of the last closed year to come out lower than the year before, you may reduce the first instalment accordingly. If the instalments already paid for last year’s tax turn out to exceed the tax finally due, you may skip the first instalment up to the amount of that excess. For the third and fourth instalments, if you anticipate a fall in profit, and therefore in the current year’s tax, you may reduce the amounts normally due, and you may even bring an instalment down to zero if you consider that the instalments already paid will cover the whole tax bill for the year. The code itself contains the most powerful version of this right, again in Article 1668<\/a>: “L’entreprise qui estime que le montant des acomptes d\u00e9j\u00e0 vers\u00e9s au titre d’un exercice est \u00e9gal ou sup\u00e9rieur \u00e0 la cotisation totale d’imp\u00f4t sur les soci\u00e9t\u00e9s dont elle sera redevable au titre de l’exercice concern\u00e9, avant imputation des cr\u00e9dits d’imp\u00f4t, peut se dispenser de nouveaux versements d’acomptes.” In English: a company that considers that the instalments already paid for a financial year are equal to or greater than the total corporation tax it will owe for that year, before tax credits, may stop paying further instalments. This is the legal basis for switching off the September and December instalments in a bad year, and it is entirely legitimate when the estimate is honest and documented.<\/p>\n The boundary between honest modulation and punishable underpayment is drawn by article 1731<\/a> of the CGI: “Donne lieu \u00e0 l’application d’une majoration de 5 % tout retard dans le paiement des sommes qui doivent \u00eatre vers\u00e9es aux comptables de l’administration fiscale au titre des impositions autres que celles mentionn\u00e9es \u00e0 l’article 1730” In English: any delay in paying sums due to the tax administration’s accountants, for taxes other than those listed in article 1730, triggers a 5 percent surcharge. The administration’s website gives the same warning in practical terms: where modulation proves unjustified, a 5 percent surcharge applies to the amounts still due, together with late interest. The surcharge is automatic. It does not require fraud, bad faith, or even negligence in the ordinary sense; paying too little, too late, is enough. From the administration’s computer, an unjustified reduction looks identical to a forgotten payment, and both are processed the same way.<\/p>\n A published court decision shows exactly how this trap closes on a real company. In a judgment of 21 December 2018, case number 18MA00667, the Marseille administrative court of appeal examined the situation of SARL Promocom, a limited company assessed to corporation tax of 1,020,788 euros for the financial year ended in 2011. The company had paid four instalments and ultimately paid the full year’s tax, yet the administration had applied late interest and the 5 percent surcharge, initially 38,757 euros in total, maintained at 14,238 euros after the company’s challenge, because the first two instalments were short. The court reconstructed the arithmetic: the first provisional instalment due by 15 March 2011 should have been 828,357 euros based on the reference profit, it should then have been regularised with the second instalment due by 15 June 2011, and the company had paid only 799,369 euros by that date, leaving a shortfall of 215,827 euros in instalments due at that date. The company also failed the test for dispensation, because after the June instalment it had not yet covered the full year’s tax. The court held that the administration had correctly applied the 5 percent surcharge under article 1731 and late interest under article 1727 because of the shortfall in the first two instalments due on 15 March and 15 June 2011, even though the company later paid the full year’s tax through four instalments. The full judgment is published on the official Lgifrance database at CAA Marseille, 21 December 2018, number 18MA00667<\/a>. Three lessons follow for a director living abroad. First, paying the full year’s tax eventually does not erase an instalment shortfall; each instalment date is judged separately. Second, the March instalment, computed on old figures and easily overlooked by a busy founder, counts exactly as much as the others. Third, the company argued from an administrative doctrine comment, the BOI, and lost on the statute; doctrine helps you understand the rule, but only the code protects you.<\/p>\n Modulate, then, but modulate carefully. Ask your accountant to put the forecast in writing before each instalment date: expected full-year profit, expected tax, instalments already paid, and the resulting amount due or the reason for paying zero. Keep the workings with the year’s tax file, because if the administration questions a reduction two years later, a contemporaneous forecast based on management accounts is your evidence of good faith, while an a posteriori reconstruction carries little weight. Never modulate to zero on the basis of hoped-for year-end contracts that have not been signed, and recompute before the December instalment, when the year’s result is nearly known; the December date is the last chance to correct an optimistic September reduction before the balance statement crystallises the shortfall. If cash is tight, remember that paying the instalment late is not a strategy but a priced option: the 5 percent surcharge plus monthly interest accrue from the due date, so a short-term cash delay should be compared honestly with the cost of a bank overdraft. And if you receive a proposal of rectification or a penalty notice while you are abroad, do not let it sit: time limits for contesting run from notification to the registered office, and a letter unopened in Paris binds a director in Singapore.<\/p>\n A loss-making year is not a total loss for tax purposes. Article 209 of the CGI provides that a deficit incurred in one year is treated as a charge of the following year and deducted from that year’s profit, within an annual ceiling. The code states: “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” In English: where a deficit is incurred in a financial year, that deficit is treated as a charge of the following year and deducted from the profit of that year, up to 1,000,000 euros plus 50 percent of the taxable profit of that year exceeding that first amount. The official article is published at article 209 of the general tax code<\/a>. A numerical example makes the mechanism concrete. Suppose your SAS loses 3,000,000 euros in 2026 and earns 2,400,000 euros of taxable profit in 2027. The 2027 deduction ceiling is 1,000,000 euros plus 50 percent of the profit above 1,000,000 euros, that is 1,000,000 plus 50 percent of 1,400,000, which equals 1,700,000 euros. The company deducts 1,700,000 euros in 2027, pays tax on the remaining 700,000 euros, and carries the unused 1,300,000 euros of deficit forward to 2028 and beyond. The carry-forward is unlimited in time as long as the company continues its activity, but each profitable year only absorbs a capped slice, so large losses shelter profits progressively over several years rather than all at once. This matters for instalments too: a company emerging from losses with a capped deduction still owes tax on the uncapped remainder, and its instalments, computed mechanically on the last closed year’s tax, may overstate or understate the real liability, which is precisely when documented modulation becomes valuable.<\/p>\n A second, more aggressive tool exists for profitable history: the carry-back, in French report en arriere, under article 220 quinquies of the CGI. The mechanism allows a deficit, by election, to be treated as a deductible charge against the profit of the preceding year, within the limit of the undistributed portion of that profit, excluding exempt profits and profits that generated tax paid through credits or reductions. The code opens with the principle: “peut, sur option, \u00eatre consid\u00e9r\u00e9 comme une charge d\u00e9ductible du b\u00e9n\u00e9fice de l’exercice pr\u00e9c\u00e9dent, dans la limite de la fraction non distribu\u00e9e de ce b\u00e9n\u00e9fice” In English: by way of exception to article 209, the deficit of a financial year may, if the company so elects, be treated as a deductible charge against the profit of the preceding year, up to the undistributed portion of that profit. The official article is published at article 220 quinquies of the general tax code<\/a>. The economic effect is a claim against the Treasury: the tax paid on last year’s profit, to the extent erased by this year’s loss, becomes a receivable that can be used against future tax or refunded after five years, sooner for small companies and in specific cases. The election must be made with the results return for the loss year, it is irrevocable in its scope once made, and the deficit so used can never be carried forward again. For a foreign-owned company that paid substantial tax in a good year and then suffers a bad year, the carry-back converts a paper loss into a concrete Treasury claim, but the computation interacts with distributions, exempt profits, and tax credits, so it should be modelled by the accountant before the return is filed, not discovered afterwards.<\/p>\n The highest French administrative court has confirmed how seriously the deficit ceiling must be read. In a decision of 25 May 2018, number 415695, the Conseil d’Etat, eighth chamber, ruled on the Technicolor company’s challenge to the administration’s commentary on the top-up to the 1,000,000 euro ceiling for companies granting debt waivers to companies in difficulty. The court recalled the ceiling mechanism of article 209, under which a deficit is treated as a charge of the following year within the limit of 1,000,000 euros plus half of the taxable profit above that amount, subject to the carry-back election. It then examined successive versions of the top-up rule for debt waivers granted under a court-approved conciliation agreement or insolvency proceedings, noted that the legislature had replaced the 2012 wording with clearer 2016 wording of the same object and scope, confirmed as interpretative by the Constitutional Council’s decision number 2018-700 QPC of 13 April 2018, and rejected the company’s request. The decision is published on the official database at Conseil d’Etat, 25 May 2018, number 415695<\/a>. For a foreign founder, the case carries two messages beyond its technical holding. First, deficit rules are statute-first: commentary, the BOI (bulletin officiel des finances publiques, the administration’s published doctrine), and even plausible readings of older versions yield to the current text of article 209. Second, groups in difficulty that waive debts owed by a French subsidiary to rescue it should check, before signing, whether the waiver increases the French company’s deficit absorption ceiling, because the top-up exists precisely for waivers granted within conciliation or insolvency proceedings, and its conditions are strict.<\/p>\n In practice, loss management from abroad follows a short checklist. File the loss year’s results return on time and in full, because an undeclared or late-declared deficit is a deficit you cannot use, and the penalties for late filing apply to loss returns too. Decide on the carry-back election before the filing deadline, with a written computation of the Treasury claim and its use over the following years, since the election cannot be improvised later. Track the stock of unused deficits year by year in a schedule your accountant maintains, showing the origin year, amounts used, and the remaining balance, because the ceiling computation each profitable year depends on that history and the administration will ask for it in any audit. If the company changes activity substantially or ceases trading, take advice immediately, because the right to carry losses forward can be lost when the business that generated them disappears. And if the French company belongs to a group with a French parent that elected for tax consolidation, the groupe d’integration fiscale, verify who owns the deficits: in an integrated group, results are pooled at the parent level under specific rules, and the subsidiary’s individual instalments and loss position follow a different logic that your group tax team must coordinate.<\/p>\n Late payment of corporation tax has a two-layer price, and both layers run automatically. The first layer is late interest, the interet de retard. Article 1727 of the CGI provides the principle: “Toute cr\u00e9ance de nature fiscale, dont l’\u00e9tablissement ou le recouvrement incombe aux administrations fiscales, qui n’a pas \u00e9t\u00e9 acquitt\u00e9e dans le d\u00e9lai l\u00e9gal donne lieu au versement d’un int\u00e9r\u00eat de retard.” In English: any tax debt handled by the tax administration that is not paid by the legal deadline gives rise to late interest. The rate is set by the same article: “Le taux de l’int\u00e9r\u00eat de retard est de 0,20 % par mois. Il s’applique sur le montant des cr\u00e9ances de nature fiscale mises \u00e0 la charge du contribuable ou dont le versement a \u00e9t\u00e9 diff\u00e9r\u00e9.” In English: the late interest rate is 0.20 percent per month, applied to the amount of the tax debts charged to the taxpayer or whose payment was deferred. The official article is published at article 1727 of the general tax code<\/a>. Interest runs from the first day of the month following the month in which the tax should have been paid until the last day of the month of actual payment, which means a payment a few days late costs a full month of interest, and a payment thirteen months late costs thirteen months. At 0.20 percent per month, the annualised cost is about 2.4 percent, modest in isolation, but it stacks on top of the surcharge and it cannot be negotiated away by explaining that you live abroad.<\/p>\n The second layer is the surcharge. As seen above, article 1731 applies a 5 percent surcharge to any delay in paying sums due to the tax administration, for taxes outside the scope of article 1730, which covers personal income tax and local taxes rather than corporation tax. The official article is published at article 1731 of the general tax code<\/a>. A third provision punishes late filing itself, as distinct from late payment. Article 1728 of the CGI provides: “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” In English: failure to file a return or document needed to assess the tax by the deadline triggers a surcharge on the tax due of 10 percent where there was no formal demand, or where the return is filed within thirty days of receiving one, and 40 percent where it is not filed within those thirty days, with 80 percent reserved for hidden activity. The official article is published at article 1728 of the general tax code<\/a>. Put the three layers together for a concrete case: a company that files its balance statement three months late and pays 100,000 euros of balance late, without having received a formal demand, faces roughly 10,000 euros of filing surcharge, 5,000 euros of payment surcharge, and about 600 to 800 euros of late interest, before any question of bad faith arises. The instalment article itself is published at article 1668 of the general tax code<\/a>, the rate article at article 219 of the general tax code<\/a>, and the administration’s practical guidance on adjusting instalments at the official impots.gouv.fr page on changing corporation tax instalments<\/a> with the detailed doctrine at BOI-IS-DECLA-20-10 on provisional instalment payments<\/a> and BOI-IS-DECLA-20-20 on balance payment mechanics<\/a>.<\/p>\nI. Paying French corporation tax on time from abroad: instalments and the year-end balance<\/h2>\n
A. How do the four instalments and the final balance work when you live abroad?<\/h3>\n
B. Can you reduce, suspend or skip instalments without triggering the 5 percent surcharge?<\/h3>\n
II. Turning a French loss into cash: deficit carry-forward, carry-back and the price of delay<\/h2>\n
A. How does the 1 million euro plus 50 percent loss carry-forward cap work in practice?<\/h3>\n
B. What does a late payment really cost, and how long can the tax office look back?<\/h3>\n