You will shortly receive a bill from the tax people for the Contribution Fonciere des Entreprises (CFE). This tax was introduced last year to replace the Taxe Profesionnelle. All French entrepreneurs with an entreprise individuelle under régime simplifié, EIRL, EURL or SARL are liable to CFE from their second year in business, as there is an exoneration in year one. However auto-entrerepreneurs and micro-entreprises should automatically benefit from a three year exoneration.
What is the Contribution Fonciere des Entreprises?
The Contribution Fonciere des Entreprises replaced the Taxe Professionnelle in January 2010 and represents a portion of Contribution Economic Territoriale (CET). It is a local tax paid by businesses to local authorities, such as Chambre de Commerce et de l'Indutrie and Chambre des Metiers. The CET tax is divided bewteen the: Cotisation sur la Valeur Ajoutée des Entreprises (CVAE), a contribution based on your business’ added value (only paid by larger businesses with a turnover over 152,500€) and the Cotisation Financière des Entreprises (CFE), a taxed based on your office, workshop, equipement and the town you live in. Entrepreneurs are only liable to CFE in their second year in business.
How much does CFE amount to?
The Contribution Fonciere des Entreprises varies according to the number of employees you may have, your business asset, e.g. plant, and your business location called siege social. Basically a one-man business (or woman...) with no employees based in a small village may pay 180€ to 300€, while a larger business with 10 employees based in Lille may pay 800€.
3 years' CFE exoneration for auto-entrepreneurs and micro-entreprises
According to the 2011 Loi de Finance, all auto-entrepreneurs and micro-entreprises should benefit from an automatic 3 years exoneration. For instance if you registered your auto-entreprise in March 2009, you will not pay Contribution Fonciere des Entreprises in 2009, 2010 and 2011. What should you do if you have received a CFE bill from the tax office? You will need to contact them to confirm their mistake.