Business incorporation tax reduced in France from 33% to 25%

By Valérie Aston on 7 September 2017 · Viewed 363 times · Questions

Business incorporation tax in France called Impot sur les Sociétés (IS) will be reduced from 2018. Based on his election campaign promises, President Emmanuel Macron will steadily decrease the incorporation tax in France from 33% to 25%. It will take 5 years to reach this lower level of taxation. The existing lower rate of 15% for profits below 38,120€ will remain unchanged. 

Incorporation tax in France in 2018

All incorporated businesses such as SARL, EURL, SAS or SASU with a profit of less than 500,000€ will benefit from an incorporation tax of 28% instead of 33.33%. The French incorporation tax rates in 2018 will be :

  • 15% for profits up to 38 120 €. This is referred to as taux réduit or reduced rate.
  • 28% of incorporation tax for profits from 38 120€ to 75 000 €. This is referred to as taux normal or standard rate.
  • 33.33% above 500,000€.

 

Steady decrease of incorporation tax in France from 2018

The reduced incorporation tax rates for companies with less than € 7,630,000 of turnover will remain unchanged at 15% up to € 38,120 in profits. The reductions will apply to the taux normal, i.e for profits between 38,121€ and 500,000€. 

  • in 2019: the incorporation tax for profits above 500,000 € will decrease from 33.33% to 31%.
  • in 2020: the incorporation tax for profits below 500,000€ will decrease from 31% to 28%.
  • in 2021: the normal incorporation tax rate will decrease from 28% to 26.5%.
  • in 2022: the normal rate will decrease from 26.5% to 25%.

Valerie Lemiere: Start Business in France

About the author: Valérie Aston

I've been helping people who want to start or already have a small business set up in France since 2009. After graduating from a Master of Business Administration (MBA) degree, I worked as a senior marketing consultant in the UK and France for various International companies. I worked as a conseillère en création d'entreprises (senior business advisor) for BGE here in France and run this independent business on a daily basis.