Opening an establishment, renting premises, employing staff or using vehicles in France does not only generate VAT. Several direct and local taxes, often less familiar to foreign companies, can apply as soon as the company has a presence in France.
For a European company setting up, or considering it, the aim is to identify these taxes early, to know who files them and when, and to avoid an unexpected bill after a few months of activity. Here is an overview of the main taxes and the points to watch.
Why look at them from day one
VAT tends to dominate foreign companies’ attention because it is tied to sales. Local and direct taxes are tied to presence in France: premises, employees, vehicles, real estate. They often rely on specific returns and on tax notices issued by the authorities, sometimes when the company does not expect them.
If your company has no stable presence in France yet but makes sales there, the question of VAT and registration comes first; local taxes follow with the establishment.
The main taxes to identify
| Tax | Who is concerned? |
|---|---|
| CFE | Business property contribution: due for each establishment carrying on a professional activity in France. |
| CVAE | Concerns businesses with high turnover, being phased out under a timetable that has been adjusted. |
| Property tax | Due from owners of real estate. |
| Payroll tax | For employers not subject to VAT, in whole or in part. |
| Company vehicle taxes | Two annual taxes based on emissions. |
Depending on the sector, other sector-specific taxes may apply, such as IFER for certain installations. Each tax is detailed in the direct taxes section.
What to know about each one
CFE and CVAE
The CFE follows the existence of an establishment and a professional activity, with initial returns to be filed on creation. The CVAE is being phased out; since the timetable has been adjusted, the rules for the year concerned must be checked.
Property tax and payroll tax
Property tax concerns owners, while payroll tax affects employers that are not subject to VAT, in whole or in part: the share of VAT-able activity determines the exposure.
Company vehicles
Since the 2022 reform, two annual emissions-based taxes have replaced the former TVS. Read our dedicated article: the two annual company vehicle taxes.
The key watch point: tax notices
These taxes rely on bases that are sometimes wrong (surface area, rental value, pro rata). Checking the notices received helps spot anomalies and, where appropriate, claim relief within the time limits.
The time limit for claims is restricted and depends on the tax concerned: it is better to review notices as soon as they arrive. See our page on tax relief claims.
A practical checklist before opening
Before the first day of activity, a short review saves time and avoids surprises. The questions below help structure it.
- Will the company have premises, staff or vehicles in France, and from what date?
- Is the activity fully, partly or not at all subject to VAT?
- Who will receive the tax notices, and at which address?
- Which filings are due on creation, and who is responsible for them?
- Who will check the notices when they arrive, and within what time limit?
How Hanoutax can help
Hanoutax acts as your French VAT agent (mandataire fiscal) and handles these filings on behalf of your company under a written mandate. We also check your tax notices. Discover all our services on direct taxes.
To share your situation, contact us, or start with the quick check of your tax obligations.
FAQ
Does a foreign company have to pay CFE?
CFE is due for each establishment carrying on a professional activity in France. A foreign company with an establishment in France may therefore be subject to it, subject to exemption rules and the specifics of its situation.
Does the CVAE still exist?
It concerns businesses with high turnover and is being phased out under an adjusted timetable. The rules applicable for the year concerned must therefore be checked.
Who pays payroll tax?
Employers not subject to VAT, in whole or in part. A company whose activity is entirely subject to VAT is in principle not concerned, but exposure depends on the share of turnover subject to the tax.
How can a local tax be challenged?
By checking the tax notice and, where there is an anomaly in surface area, rental value or a pro rata, by claiming relief within the applicable time limit. It is best to review the notice as soon as it arrives.
Are these taxes on top of VAT?
Yes. They are separate from VAT and tied to presence in France: establishment, premises, employees, vehicles, real estate. They have their own returns and their own timetables.
An establishment in France? Review your taxes
Related reading
Informational content, not legal advice. The rules that apply depend on your situation.
