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France - TAXES ACCOUNTING |
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Corporate tax
Tax rate for resident companies |
The standard corporate tax rate amounts to 33.33%. A 3% surtax is imposed on the gross corporate income tax. Consequently, the effective tax rate is 34.33%.
A social security surtax of 3.3% is also assessed on the portion of the corporate tax due exceeding 763,000 EUR if the annual turnover of the company exceeds 7,630,000 EUR or if less than 75% of the capital is not owned directly or undirectly by individuals.
Companies whose annual turnover is below 7,630,000 EUR and for which at least 75% of the company is owned directly or undirectly by individuals are taxed at 15% up to 38,120 EUR.
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Taxe rate on long-term capital gains |
Since January 1st, 1997, the tax rate on short-term and long-term capital gains is the standard rate of 33.33%; nevertheless, a 19% discount tax rate applies to long-term capital gains (2 years or more) on transfer of equity shares or risk capital shares if some conditions are fulfilled.
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Tax rate on branches |
Under some reserves, subsidiaries and branches are taxes the same way as French companies. Only a few differences characterize branches because of their lack of autonomous legal personality.
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Income tax
Fiscal year |
The fiscal year begins on January 1-st and ends on December 31 of the same year.
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Income tax rate |
2005 income tax rates: - From 0 to 4.334 EUR: 0%
- From 4.334 to 8.524 EUR: 6,83%
- From 8.524 to 15.004 EUR: 19,14%
- From 15.004 to 24.294 EUR: 28,26%
- From 24.294 to 39.529 EUR: 37,38%
- From 39.529 to 48.747 EUR: 42,62%
- Beyond 48.747 EUR: 48,09%
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Tax deductions or
other allowances |
Tax allowances (20%) and deductions (10%) must be applied before the calculation of the fiscal result. The net income tax basis amounts then to 72% of the net income.
Some tax reductions after calculation of the fiscal result (such as reductions as regards to the degree of studies of the children, gift for charitave associations, capital for setting-up of companies...) can be deducted from the due amount.
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VAT rates
Standard rates |
The regular VAT rate is 19.6%.
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Reduced rates |
The reduced VAT rates are 2.1% and 5.5%. The 5.5% tax rate applies for basic foodstuff. The 2.1% tax rate applies for medicines and newspapers.
Special rates apply in Corsica and the overseas departments (DOM):
a) CORSICA
0.90%: certain theatrical shows and circuses, sales of live meat and charcuterie animals to persons not liable to pay tax;
2.10%: goods supplied in Corsica to which the reduced rates are applicable in mainland France;
8%: certain work on immovable property, agricultural equipment and sales for consumption on the premises, sales of electricity supplied at low voltage;
13%: petroleum products;
The standard rate applicable in Corsica is the same as in the rest of the country: 19.6%.
b) DOM
In the overseas departments, but not French Guiana, a reduced rate of 2.10% and a standard rate of 8.5% are applicable.
c) MONACO
Goods and services supplied to or from the Principality of Monaco are regarded as having been supplied to or from France.
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Other important taxes
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Name of tax |
Rate |
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The annual fixed levy of companies or IFA is due for every company (existing on the 1st January of the tax year) for which the summing - up of turnover and financial revenues exceeds 76,000 EUR.
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of 750 EUR to 30.000 EUR regarding the turnover of the fiscal year.
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Tax on the personal vehicles owned by companies
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1,130 EUR or 2,440 EUR depending the tax category of the car.
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Business activity tax
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This rate is assessed on the the value of the fixed assets. It varies and is voted by the local authorities.
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Patrimonial tax (ISF)
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This tax applies for the value of the patrimony of the individuals established in France or who own some property within if this property value is superior to 732,000 EUR (01/01/2005). The patrimony tax rate varies from 0% to 1.80.
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Succession duties
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5% to 60%
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Donation duties
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5% to 60%
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Local taxes
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Vary regarding the localities
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Accounting
Introduction
French accounting is regulated by the law. The law gives details about the accounting and financial information that the company has to establish and publish. It gives also a general orientation of fundamental principles to respect. This right arises from legislative or statutory rules as the commercial code, the labour regulations, the general tax law and also the jurisprudence and the doctrine.The companies have to produce each year a balance sheet, a profit and loss account and annexes which have to be published to the Register of Commerce.
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Certification and auditing
The control of accounts is compulsory and must be made by an external "reviser" of the company. This reviser has to respect the main accounting rules issued by the International Accounting Standards Committee (IASC). The Chartered Accountants Association and the National Auditors Company represent France to the IASC.
Professionals and representative organizations
The National Auditors Company.
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Export Entreprises SA ©, All rights reserved
Last modified in
January 2005
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