France Corporate Tax 2026: 25% CIT Rate, VAT, R&D Credits & Filing Guide

The standard corporate income tax (impôt sur les sociétés) rate is 25% for all companies. Small and medium-sized companies with turnover under €10 million and at least 75% of share capital held by individuals pay a reduced 15% rate on the first €42,500 of taxable profit. Above that threshold, the 25% rate applies. Large companies with French turnover over €1 billion also pay an additional exceptional surtax for fiscal years ending in 2025 and 2026.

Both SARL and SAS are subject to the same corporate income tax rules — 25% standard rate, 15% reduced rate for qualifying SMEs. The main difference is governance flexibility: SAS allows more customised articles of association, while SARL has a more rigid structure. Both can benefit from the SME reduced rate if they meet the turnover and shareholder conditions. Dividends paid to individual shareholders of both forms are taxed at the 30% flat tax (12.8% income tax + 17.2% social charges).

The Crédit d'Impôt Recherche (CIR) is a 30% tax credit on eligible R&D expenditure up to €100 million, and 5% on spending above that threshold. It is available to all companies subject to corporate income tax on actual profits, regardless of size. Eligible costs include researcher salaries, depreciation of R&D equipment, and spending on external research organisations. For SMEs, the credit is refundable — if it exceeds your tax liability, you receive a cash refund. The Innovation Tax Credit (CII) extends a 30% credit (up to €400,000 per year) to SME spending on prototype design.

French companies pay 25% withholding tax on dividends distributed to non-resident companies, and 12.8% on dividends to non-resident individuals. EU parent companies that hold at least 10% of the French subsidiary's capital for at least two years are exempt from withholding tax under the EU Parent-Subsidiary Directive. Double tax treaties can reduce these rates further — France has over 120 such treaties. Payments to entities in non-cooperative jurisdictions face a 75% withholding tax.

France charges TVA at four rates. The standard 20% rate applies to most goods and services. The 10% reduced rate covers restaurants, hotels, passenger transport, and some construction. The 5.5% rate applies to food, books, medicines not covered by social security, and energy-efficiency works. A special 2.1% rate applies to press publications and reimbursed medicines. VAT registration is required once annual turnover exceeds €85,000 for goods or €37,500 for services.

Companies with French turnover of €1 billion or more pay an exceptional contribution on top of standard CIT. This surtax was introduced by the 2025 Finance Act for FY 2025 and is extended (at halved rates) to FY 2026. For FY 2025, the rate was 12% for companies with €1–3 billion in turnover and higher for those above €3 billion. For FY 2026, these rates are cut in half. The surtax is calculated on the average CIT of the current and previous year, before applying any tax credits or reductions, and is not deductible from taxable income.

For calendar-year companies (fiscal year ending December 31), the annual corporate tax return (Form 2065-SD) is due on the second working day after May 1. The final tax balance is due May 15. Advance payments are made quarterly on March 15, June 15, September 15, and December 15. Companies with a non-calendar fiscal year must file within three months of their fiscal year-end. All filings are submitted electronically to the DGFiP.

Employers in France pay social contributions totalling approximately 40–45% of gross salary. These cover health insurance, old-age pension, unemployment insurance, family allowances, and other schemes. From January 2026, the formula for the general reduction in employer contributions changed: the specific reductions for sickness and family contributions were abolished, but the scope of the general rebate was broadened. Employers with a URSSAF can claim a significant reduction on contributions for employees earning up to 1.6 times the national minimum wage (SMIC).

Yes. A foreign company can open a branch (succursale) in France without creating a new legal entity. The branch pays 25% CIT on its French-source profits. There is no additional withholding tax when profits are repatriated to the foreign parent. The branch must register at the Centre de Formalités des Entreprises (CFE) and comply with French accounting and transfer-pricing requirements. For companies from EU treaty countries, normal profit attribution rules apply.