Understand the registration of French companies and the status of French corporate income tax declaration

French corporate income tax

The tax system in France is very comprehensive and complete, and it is a model of the tax system in Western countries. France adheres to the principle of territorial integrity, and as long as foreign enterprises have a permanent establishment in France, their income in France should be taxed in accordance with French tax laws.

French corporate income tax is mainly levied on the final profits of enterprises, and tax calculations and prepayments need to be made quarterly based on profit estimates. New companies with less than one year, small and micro enterprises with less than 3000 euros in taxes, and companies in deficit are exempt from prepayment taxes.

French corporate income tax declaration time:

1. If the cessation date of the company's financial statements is December 31st or if the financial statements have not been discontinued in the current year, the declaration shall be submitted no later than April 30th of the following year;

2. If the date of the company's cessation of financial statements is not December 31st, the declaration should be submitted within 3 months of the cessation of financial statements.

Adjustment of French corporate tax policy

In recent years, France has made the following major policy adjustments in terms of corporate tax:

1. Tax consolidation declaration

France has modified specific systems applicable to group tax consolidation reporting to avoid any potential violations of EU law. This system will be implemented from January 1, 2019. According to the system, the following factors for the consolidated tax declaration of the group will no longer be offset (for example, when calculating the group's taxable income):

A. Financial transactions and debt exemptions between group members;

B. Dividends that do not fall within the scope of exemption under the instructions of the parent and subsidiary companies.

2. Limitations on interest deduction

The amount of deductible interest is based on 30% of EBITDA or the higher of 3 million euros. Taxpayers will have the possibility to carry forward undivided interest (indefinitely) or unused interest (for five years). The specific system is applicable to the tax disposal of group mergers.

3. Tax refunds for loss making non resident enterprises

Starting from January 1, 2020, non resident enterprises that belong to the European Economic Area and are resident enterprises with losses may apply for a refund of the withholding income tax paid on certain income obtained. This application can be submitted within three months after tax payment and the end of the fiscal year.

4. Energy conservation reform encouragement

Starting from October 1, 2020, energy-saving renovation reform expenditures can enjoy a tax credit of 30% of the expenditure amount, with a maximum credit limit of 25000 euros. All small and medium-sized enterprises that pay personal income tax or corporate tax can apply this tax credit policy.

French company registration requirements

1. Shareholders

It can be undertaken by legal or natural persons, at least one person, and if it is a natural person, it must be at least 18 years old

2. Foreign enterprise legal person assumes the responsibility of being a shareholder of a French company: If a foreign enterprise legal person assumes the responsibility of being a shareholder of a French company, it is necessary to submit a valid business license and notarization of the enterprise legal person in the country where it is located;

3. Proof of address: If the shareholder director is a natural person, at least two different types of proof of address must be provided;

4. Registered capital: If not operating locally, it is recommended to have a registered capital of 600 euros or more, which must be in place;

5. Business scale: There are no special regulations on business scale.

France is one of the most economically developed countries in the world, with strong trade and manufacturing capabilities. It is a market economy country that implements free trade policies. After the company registration is completed, it can freely operate within or outside of France, and can set up a company bank account within or outside France (such as France, the UK, Hong Kong, etc.).

French company registration requirements

1. Shareholders

It can be undertaken by legal or natural persons, at least one person, and if it is a natural person, it must be at least 18 years old

2. Foreign enterprise legal person assumes the responsibility of being a shareholder of a French company: If a foreign enterprise legal person assumes the responsibility of being a shareholder of a French company, it is necessary to submit a valid business license and notarization of the enterprise legal person in the country where it is located;

3. Proof of address: If the shareholder director is a natural person, at least two different types of proof of address must be provided;

4. Registered capital: If not operating locally, it is recommended to have a registered capital of 600 euros or more, which must be in place;

5. Business scale: There are no special regulations on business scale.

France is one of the most economically developed countries in the world, with strong trade and manufacturing capabilities. It is a market economy country that implements free trade policies. After the company registration is completed, it can freely operate within or outside of France, and can set up a company bank account within or outside France (such as France, the UK, Hong Kong, etc.).