As soon as a foreign company has premises or land in France used for its professional activity, it falls within the scope of the CFE (cotisation foncière des entreprises), the business property contribution. As a local tax, CFE is often discovered late, when the first tax notice arrives.
This guide explains who is concerned, how the contribution is calculated, the calendar to follow and the levers to reduce the burden. It is distinct from VAT registration in France for a foreign company.
Who is subject to CFE?
CFE targets businesses that habitually carry on a self-employed professional activity in France. For a foreign company, it applies as soon as it has an establishment: an office, warehouse, shop or industrial site.
How CFE is calculated
The tax base is the rental value of the real estate used for the activity. The rate is set by the municipality or inter-municipal body, which explains large differences between areas.
Where the rental value is low, a minimum contribution, set locally, may apply.
| Item | What to know |
|---|---|
| Base | Rental value of the real estate used |
| Rate | Set by the municipality or inter-municipal body |
| Minimum contribution | Set locally when the base is low |
| Taxpayer | The business holding the establishment |
The calendar to know
- Year of set-up: an initial return must be filed, in principle before year-end. CFE is generally not due for that first year.
- Following year: the base is generally reduced by half.
- Every year: the notice is posted in the online professional account and payment is due in mid-December, with an instalment in June above a certain amount.
The watch-point: the online notice
The CFE notice is not sent by post: it is only available in the online professional account. Without access to that account, a foreign company may miss the deadline and incur a surcharge.
Make sure someone holds the access and checks for the notice every autumn.
Levers to reduce the burden
- check the rental value and the surface declared;
- check that reductions linked to setting up an establishment are applied;
- where relevant, request the cap on the territorial economic contribution based on value added;
- review local exemptions available for certain areas or activities.
These levers depend on each situation and are checked case by case. CFE also interacts with the CVAE, the other component of the territorial economic contribution.
Frequent mistakes of foreign companies
Several oversights recur when a foreign company opens its first site in France. Spotting them early avoids surcharges and late claims.
- not filing the initial return in the year of set-up;
- having no access to the online account and missing the notice;
- not reporting the closure or transfer of an establishment;
- accepting an erroneous rental value or surface without checking.
CFE and VAT: two separate regimes
Foreign groups often assume that registering for VAT and setting up a local establishment go together. They do not. VAT registration concerns the tax on sales; CFE concerns the use of premises or land. A company can be VAT-registered without CFE, or have an establishment that triggers CFE alongside its VAT obligations.
In practice, opening a warehouse or an office is the moment to review the full picture: local taxes, VAT returns, and the corporate tax position of the French establishment. Anticipating these points avoids discovering the CFE through a first notice and a surcharge.
- VAT: filed through periodic returns by the VAT-registered company;
- CFE: initial return in the year of set-up, then an annual notice online;
- coordination: one person should own both calendars.
How Hanoutax can help
Hanoutax files your CFE returns, checks your tax notices and lodges claims where the tax is too high. The firm also acts as a French VAT agent for foreign companies, including VAT registration in France and VAT returns. Hanoutax is a tax agent, not a fiscal representative in France in the legal sense: see fiscal representative in France.
Discover our CFE service.
FAQ
Does a foreign company without premises in France pay CFE?
In principle no: a mere VAT registration is not enough. CFE requires an establishment (premises or land used).
Who sets the CFE rate?
The municipality or inter-municipal body, hence large differences between areas.
How is the CFE notice received?
Only through the online professional account, not by post.
Is CFE due in the first year?
It is generally not due for the year of set-up, but an initial return must be filed. To be checked for each situation.
Can an excessive CFE be challenged?
Yes, through a claim, notably if the rental value or surface used appear wrong.
An establishment in France? Let us talk about your CFE
Related reading
Informational content, not legal advice. The rules that apply depend on your situation.
