Exemptions may apply for SMEs
A reduced tax rate applies for small and medium-sized enterprises (SMEs). Companies with sales that do not exceed €10m have a corporation tax rate of 15% if their profits are no higher than €38,120. Profits that go beyond that level have to be taxed at a rate of 25%
In order to be able to benefit from the reduced tax rate, the company’s capital would have to be fully paid up and at least 75% of the company or its French permanent establishment would have to be directly or indirectly owned by natural persons, provided that the group’s consolidated sales did not exceed €10m.
No differences in the tax rate despite the €250m threshold
The tax rate for companies with minimum sales of €250m was 27.50% in 2021. Companies with sales below €250m were subject to a tax rate of 26.50% in 2021.
The current tax rate (applicable since 1.1.2022) is 25% for all companies irrespective of their level of sales.
A solidarity surcharge applies to companies whose corporation tax liability exceeds €763k and on the portion of the tax above this level it is charged at a rate of 3.3% of the liability.
The rate for the contribution based on the value added by the company (Contribution sur la Valeur Ajoutée des Entreprises, CVAE) was reduced as of 1.1.2021 from 1.5% to 0.75% of the value added by a company (accounting earnings before tax + personnel expenses + rent + depreciation and amortisation + other taxes + addition to provisions and valuation adjustments + interest expense).
In a sample calculation where the taxable earnings constitute ¼ of the business value added, despite the reduction and from an economic point of view, the CVAE would represent 3% of earnings (0.75% / ¼ ). In this example, the overall CVAE rate would be 28.825% (25% + 3.25%).