Direct taxes in France: corporate income tax, CFE, CVAE, IFER, payroll tax and more

What are direct local and related taxes?

“Direct taxes” here means the levies the French tax authority establishes from a business’s situation in France, generally as at 1 January of the year, and which the business pays on a tax notice or a specific return. They come on top of VAT and corporate income tax (CIT), whose registration has its own dedicated guide, and should not be confused with them.

The main ones are corporate income tax, the business property contribution (CFE), the contribution on business added value (CVAE, being phased out), the flat-rate tax on network companies (IFER), payroll tax, the annual taxes on company vehicles, property taxes and the development tax.

Each has its own taxable event, base, form and calendar. That diversity is why foreign companies often miss one: a tax that was never declared does not always show up on its own in a notice.

Our detailed guides, tax by tax

Each tax has a dedicated guide:

• Corporate tax registration: tax registration of a foreign company run or established in France, returns and instalments.
• CFE: business property contribution, due for each establishment in France.
• CVAE: contribution on business added value, being gradually abolished.
• IFER: flat-rate tax on network companies (energy, rail, telecoms).
• Payroll tax: for employers not subject, or only partly subject, to VAT.
• Company vehicle taxes: annual taxes on CO₂ emissions and air pollutants (former TVS).
• Property tax and development tax: filings linked to your premises and construction work.
• Tax relief and claims: requests to reduce or correct your direct taxes.

Which foreign companies are affected?

The test is not the company’s nationality but its presence in France. An EU company may be concerned as soon as it has, for example:

• effective management or an establishment in France (corporate income tax, depending on the applicable tax treaty);
• premises or a warehouse, leased or owned (CFE, property taxes);
• employees or an employing establishment (payroll tax, if it is not subject to VAT under the conditions set by law);
• vehicles used for the business in France (vehicle taxes);
• energy-production installations or networks (IFER);
• enough turnover to fall within CVAE for as long as it exists.

Whether you have an establishment in France is decisive: see our article on permanent establishment in France.

Overview: taxable event, form, period

Exact deadlines depend on the company’s regime and are detailed in each guide.

A four-step approach

Common mistakes

• Assuming a rented warehouse or office in France creates no local tax.
• Forgetting the initial return when opening an establishment.
• Not updating returns after a move, an extension or a closure.
• Missing the claim deadline because the notice was received abroad.
• Confusing payroll tax with social charges, or ignoring vehicle taxes.
• Believing that a registered office abroad rules out any corporate income tax in France.

See also our common tax mistakes of foreign companies.

How Hanoutax helps as your mandatary

Hanoutax is a VAT and tax mandatary: we act under a written mandate on your behalf with the French authorities. For corporate income tax, we prepare and follow the registration formality and the calendar of deadlines, in coordination with your accountant (see corporate tax registration). For the other direct taxes we can prepare and file returns, check bases and notices received, monitor payment deadlines and prepare claims where an error is found. The scope is set by the power of attorney with the tax authorities.

For VAT, see also VAT registration and VAT returns. Official sources (in French): CFE on Service-Public Entreprendre and other taxes on economie.gouv.fr.

FAQ

Informational content, which does not constitute legal advice. The rules that apply depend on your situation.