How corporate tax works in France
French corporate income tax (impôt sur les sociétés, IS) generally applies to companies resident in France on French-source profits. In the usual territorial design, foreign permanent-establishment profits are often kept outside the French base when a treaty or PE structure applies, but anti-abuse, CFC-style and transfer-pricing rules still matter.
The standard rate is 25%. Qualifying small corporations can use 15% on the first EUR 42,500 of taxable profit if turnover and ownership conditions are met. Larger taxpayers may also face a 3.3% social contribution calculated on the corporate-tax bill once it exceeds EUR 763,000.
Very large groups can face an exceptional contribution based on high French turnover thresholds under recent finance laws, and multinationals above the EUR 750 million GloBE threshold can face France’s 15% domestic minimum top-up tax. Day-to-day operating companies still also deal with VAT, payroll, local business taxes and withholding taxes.
Tax rates at a glance
- Standard corporate tax
- 25%Headline
- SME reduced rate
- 15% on first EUR 42,500
- Social contribution on CIT
- 3.3%
- IP Box reduced rate
- 10%
- QDMTT / Pillar Two
- 15%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersOperating companiesHolding companiesCross-border groupsInvestors
Watch out for
- A 25% headline rate is only the start. Payroll social security, VAT, local taxes, interest-deduction limits and transfer pricing can move the effective burden more than a small rate difference.
- The SME 15% band is limited to the first EUR 42,500 and only applies if ownership and turnover tests are met. It is not a general small-business 15% rate on all profits.
- Large companies can face additional contributions and Pillar Two top-up tax. Model group turnover carefully before assuming the ordinary 25% rate is the whole answer.
- Distributions to shareholders are a separate layer. Resident individuals often face the 31.4% PFU on dividends, while non-resident withholding depends on status and treaty relief.
Frequently asked questions
Does France have corporate tax?
Yes. The standard corporate income tax rate is 25%, with a 15% reduced rate on the first EUR 42,500 for qualifying SMEs.
What is the total corporate tax rate in France?
Most companies start from 25%. Larger taxpayers can add the 3.3% social contribution on CIT, exceptional contributions for very high-turnover groups and, for in-scope multinationals, a 15% minimum tax framework.
Are dividends from a French company taxed?
Yes. The company pays corporate tax on profits first. When profits are distributed, shareholders can face PFU taxation, progressive election rules or non-resident withholding depending on who receives the dividend.