Company Formation & Tax in France
The EU's second-largest economy — the flexible SAS, the corporate tax rate and SME relief, VAT, and one of the world's most generous R&D credits.
France combines a large domestic market and EU single-market access with a corporate tax rate that has fallen sharply in recent years — from 33% to a flat 25%. For innovative businesses, the real draw is the CIR research credit, among the most generous R&D incentives anywhere.
Choosing an entity
The most popular vehicle for foreign investors is the SAS (société par actions simplifiée), prized for its governance flexibility and formable from EUR 1 of capital. The SARL (société à responsabilité limitée) is the traditional small-business form, also with no minimum capital since 2003, while the SA (société anonyme) suits larger, capital-raising businesses. Companies with share capital are taxed under corporate income tax (impôt sur les sociétés) by default. Registration runs through the national one-stop guichet unique (INPI).
Corporate tax and VAT
| Tax | Rate |
|---|---|
| Corporate income tax (standard) | 25% |
| Reduced SME rate (first €42,500 of profit) | 15% |
| VAT (standard) | 20% |
| VAT (reduced) | 10% / 5.5% / 2.1% |
Corporate income tax is a flat 25%. Qualifying SMEs — turnover under €10 million with at least 75% of capital held by individuals — pay a reduced 15% on their first €42,500 of profit. A 3.3% social contribution applies to companies with a large CIT liability, and very large companies (French turnover over €1 billion) face an exceptional surtax for fiscal years ending in 2025 and 2026. VAT (TVA) is 20% standard, with reduced rates of 10%, 5.5% and 2.1%.
Compliance
Companies register for corporate tax and VAT, file annual financial statements, and submit a corporate tax return (calendar-year filers generally by mid-May). Employer social contributions are significant — broadly 40–45% of gross salary — and should be built into any hiring model. Dividends to qualifying EU parent companies are generally exempt under the Parent-Subsidiary Directive.
Frequently asked questions
What is the corporate tax rate in France?
A flat 25%, with a reduced 15% rate on the first €42,500 of profit for qualifying SMEs.
What is an SAS versus an SARL?
Both are taxed the same way; the SAS offers greater governance flexibility and is generally preferred by foreign investors, while the SARL is the traditional small-business form.
What is the French VAT rate?
20% standard, with reduced rates of 10%, 5.5% and 2.1%.
What is the CIR?
The Crédit Impôt Recherche — France's R&D tax credit, worth up to 30% of qualifying research expenditure.
Official sources
- impots.gouv.fr — Tax4Business
- INPI — guichet unique (business registration)
- Service-Public — Entreprendre
This guide is general information prepared by ARM Management and is current as at June 2026. It is not legal or tax advice; reliefs carry conditions and rules change. Confirm against the official sources above, or with an advisor, before acting.
Establish in France with the right structure.
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