France: French Tax Update - Main French Tax Rates For 2015

Last Updated: 9 September 2015
Article by Nicolas André and Alexios Theologitis

This special French Tax Update provides an overview of the main tax rates applicable in France. The figures contained in the charts below are provided for information purposes only, are current as at August 31, 2015, and may be subject to specific conditions, limitations or specific regimes.

Tax Rate Comments
Corporate Income Tax (impôt sur les sociétés, CIT) 33.33% Standard rate
15% Reduced rate for SMEs on the first EUR 38,120 of taxable profits
15% Reduced rate applicable to royalties derived from the sale of property rights or licence fees, patentable inventions, etc.
0% Reduced rate applicable to 88% of the amount of the capital gains arising from the sale of substantial equity interests
Social Surcharge on CIT (contribution sociale sur l'impôt sur les sociétés, SC) 3.3% Applicable where the CIT liability exceeds EUR 763,000 (except for SMEs whose turnover is less than EUR 7,630,000)
Temporary Surcharge on CIT (contribution exceptionnelle sur l'impôt sur les societies, TS) 10.7% Applicable where the turnover exceeds EUR 250 million (should be repealed in 2017)
Maximum Effective CIT rate 38.1% Where both the SC and the TS are applicable
Contribution on Distributed Income (contribution additionnelle sur les revenus distributes, C3S) 3% Distributions of shares are inter alia exempted
Corporate Social Solidarity Contribution (contribution sociale de solidarité des sociétés, C3S) 0.16% Based on the turnover (to which may be applied a EUR 3,250,000 deduction)
Business Premises Contribution (cotisation foncière des entreprises, CFE) 26% Nationwide average rate (applicable rate voted by local authorities and may greatly vary); basis is the rental value of premises subject to Property Tax
Contribution on Business Value Added (contribution sur la valeur ajoutée des entreprises, CVAE) 1.5% Applicable where the turnover exceeds EUR 152,000
Payroll Tax (taxe sur les salaires) 4.25-20% Levied on salaries paid by companies that are not viable to VAT for at least 90% of their turnover
Apprenticeship Tax (taxe d'apprentissage) 0.68% Levied on salaries paid by companies
Additional Apprenticeship Contribution (contribution supplémentaire à l'apprentissage) .05 -0.6% Levied on salaries paid by companies

WITHHOLDING TAXES

The rates below are subject to any reduction or exemption provided by an applicable double tax treaty, if any.

Tax Rate Comments

Withholding Tax on Dividends

30% Standard rate
21% Distributions to qualifying EEA individuals
15% Distributions to EEA non-profit organizations
0% Distributions to qualifying EEA companies or qualifying EU investment funds
75% Payments to a non-cooperative jurisdiction
Withholding Tax on Interest 0% General exemption
75% Payments to a non-cooperative jurisdiction
Withholding Tax on Royalties 33.33% Standard rate
0% Royalties paid to qualifying EU companies
75% Payments to a non-cooperative jurisdiction
Withholding Tax on Salaries, Wages, Pensions and Stock-Options 0-20% In principle creditable against French personal income tax
Withholding Tax on Qualified Founder Warrants (BSPCEs) 19% Increased to 30% where beneficiary has been employed by the issuing company for less than three years
75% Payments to a non-cooperative jurisdiction
Withholding Tax Relating to Non-Commercial Activities 33.33% Standard rate
15% For amounts paid for sporting or artistic performances provided or used in France
75% Payments to a non-cooperative jurisdiction
Withholding Tax on Branch Profits 30% Standard rate
0% For branches of EU companies
75% For branches of companies located in a non-cooperative jurisdiction

INDIRECT TAXES

Tax Rate Comments
Value Added Tax (taxe sur la valeur ajoutée, VAT) 20% Standard rate
10% Intermediate rate
5% Reduced rate
2.1% Specific reduced rate

TAXES ON INDIVIDUALS

Tax Rate Comments
Personal Income Tax (impôt sur le revenu, IRPP) 0% Taxable income not exceeding EUR 9,690
14% Taxable income between EUR 9,690 and EUR 26 764
30% Taxable income between EUR 26,764 and EUR 71 754
41% Taxable income between EUR 71,754 and EUR 151 956
45% Taxable income higher than EUR 151,956
Exceptional Contribution on High Income (contribution exceptionnelle sur les hauts revenus) 3-4% When taxable income exceeds EUR 250,000 for single taxpayers and EUR 500,000 for joint taxpayers
Social Contributions on Employment Income (CSG and CRDS) 8% Levied on employment and similar income
Social Contributions on Passive Income (CSG, CRDS and other social levies) 15.5% Levied on rental income, dividends, interest, and capital gains
Wealth Tax (impôt de solidarité sur la fortune, ISF) 0-1.5% Applicable where an individual's worldwide net worth is in excess of EUR 1,300,000
Inheritance and Gift Tax Between Parent and Children (droits de succession et de donation en ligne directe) 5% Taxable amount not exceeding EUR 8,702
10% Taxable amount between EUR 8,072 and EUR 12,109
15% Taxable amount between EUR 12,109 and EUR 15,932
20% Taxable amount between EUR 15,932 and EUR 552,324
30% Taxable amount between EUR 552,324 and EUR 902,838
40% Taxable amount between EUR 902,838 and EUR 1,805,677
45% Taxable amount higher than EUR 1,805,677
Inheritance and Gift Tax Between Unrelated Persons (droits de succession et de donation) 55 – 60% Applies to the taxable amount higher than EUR 1,594
Specific Trust Tax (prélèvement spécifique sur les trusts) 1.5% Penalty applied where assets held into a trust arrangement are not included in the settlor's personal wealth tax return

REGISTRATION DUTIES

Tax Rate Comments
Registration Duties on Transfers of Business/Goodwill (cessions de fonds de commerce et de clientele) 0-5% 3% of the fraction of the transfer price between EUR 23,000 to EUR 200,000; 5% on the fraction exceeding EUR 200,000
Registration Duties on Transfers of Shares of a Stock Company 0.1% Do not apply inter alia to share buy-backs or acquisitions of shares subject to FTT
Registration Duties on Transfers of Shares of a Partnership 3% Duties decreased by an allowance that is equal, for each share, to EUR 23,000 divided by the total number of shares
Registration Duties on Transfers of Shares in Real Estate Companies 5% Based on the price of the shares transferred
Registration Duties on Transfers of Real Estate Assets 5.09 – 5.81% To which should be added (i) the notary fees (usually up to 0.825%) and (ii) the 1% registrar fees (contribution de sécurité immobilière)
Liquidation Duties (droit de partage) 2.5% Based on the net asset value

REAL ESTATE TAXES

Tax Rate Comments
Property Tax (taxes foncières) 20% Nationwide average rate for developed lands (applicable rate voted by local authorities and may greatly vary)
Tax on Real Estate Assets (taxe sur la valeur vénale des immeubles 3% Assessed on the fair market value of French real estate assets; many exemptions are available
Withholding Tax on Real Estate Capital Gains realized by non-resident individuals 19% Applies on capital gains deriving from a transfer of French assets realized by a nonresident
75% Gains realized by a resident of a non-cooperative jurisdiction
Annual Tax on Offices (taxe annuelle sur les bureau en Ile-de-France) EUR 0.66 – 17.08 per sqm Amount depends on the nature and location of the premises
Tax on Office Constructions (redevance pour création de bureaux en Ile-de-France) EUR 32.18 – 368.95 per sqm Amount depends on the nature and location of the premises

FINANCIAL SECTOR TAXES

Tax Rate Comments
Financial Transactions Tax (taxe sur les transactions financières, FTT) 0.2% Applies to certain acquisitions of shares issued by a French company with a market cap of over EUR 1 billion; several exemptions are available
0.01% Applies to high-frequency trading operations of securities on the amount of cancelled or modified orders above a certain ceiling
0.01% Applies to certain purchases by French residents of credit default swaps on bonds issued by an EU member state that are not acquired for hedging purposes
Systemic Risk Banking Tax (taxe bancaire de risque systèmique 0.329% Applies on the minimum required equity of French banks and financial institutions
Insurance Contracts Tax (taxe sur les conventions d'assurance 7-30% Rate depends on the type of insurance contract and premium

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Nicolas André
 
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