Local business taxes
Two local taxes, one of them on its way out.
France’s local business contribution is made up of the business premises levy and the value added levy. The first stays. The second is being phased out in steps until 2030, and until then the rates change every year.
See the timetableThe first year tells you nothing.
The CFE is based on the rental value of the premises the company has at its disposal for its business. It depends neither on the result nor on turnover, which means a bad year does nothing to soften it.
It is not due in the year the establishment is created, under paragraph II of article 1478 du code général des impôts. The following year the base is halved. Many companies conclude that the CFE does not concern them, until the assessment arrives.
The CVAE is based on value added. It applies to companies with turnover above 500 000 euros, and the 2025 finance act postponed its abolition from 2027 to 2030. The maximum rate falls in steps, but it rises again in 2026 before resuming its descent.
For a foreign company the question arises as soon as it has premises in France for its business, whether through a subsidiary, a permanent establishment or a leased space.
The CVAE timetable
| Year | Maximum CVAE rate | Additional levy | Cap |
|---|---|---|---|
| 2025 | 0.19 % | 13.84 % | 1.438 % |
| 2026 | 0.28 % | 9.23 % | 1.531 % |
| 2027 | 0.28 % | 9.23 % | 1.531 % |
| 2028 | 0.19 % | 13.84 % | 1.438 % |
| 2029 | 0.09 % | 27.68 % | 1.344 % |
| 2030 | abolished | — | 1.25 % |
Abolition had been announced for 2027. It was pushed back to 2030, and the rate rises again in 2026: a multi-year projection made before 2025 therefore has to be redone.
The CFE: what catches newcomers out
- Nothing in the first yearNo CFE is due in the year the establishment is created.
- A halved base in the second yearThe reduction applies automatically, but it lasts only one year.
- An initial return not to be missedForm 1447-C is filed before 1 January of the year following creation.
- A minimum chargeWhere the rental value is low or nil, a minimum charge applies. Its amount is set by the commune within a statutory scale, graded by the turnover of two years earlier, under article 1647 D du code général des impôts.
- A December deadlineThe balance falls due on 15 December. Where an instalment applies, it falls in June.
What this means for a foreign company
- The CFE follows the premises, not the registered officeA leased office, a warehouse, a workshop: once the company has it at its disposal for its business, the tax follows.
- The assessment does not arrive by postCFE assessments are made available in the online business account. Without an account that is open and watched, nobody sees them.
- Payment goes through the tax accountIt requires a declared bank account and a valid mandate, two points best settled well before the deadline.
Who does what
Your side
- Premises, leases and sites
- The floor area and how it is used
- Paying the assessments
FRADECO
- Checking whether a charge arises, and from when
- Filing the initial 1447-C return and reporting every change
- Calculating and declaring the CVAE once the threshold is reached
- Holding the assessments against the figures declared
- Appealing where the assessment does not match what was declared
Our part
Following it through in four steps.
- 1Establish the positionWhich premises, from which date, on what basis, and for which activity. That is what determines the tax, not the legal form.
- 2File the initial returnThe 1447-C on time, with accurate areas and details, so the base is not set by estimate.
- 3Watch the assessmentsRegular checks of the online account and verification of the bases applied.
- 4Get ahead of the deadlinesThe December balance, the instalment where applicable, and the movement in CVAE rates from one year to the next.
Property decisions stay with you. We file the returns, hold every assessment against the figures declared and appeal where the two do not match.
When it pays off: in the year of creation, when there is nothing to pay. That is the only moment when the initial return is prepared without pressure, and it fixes the base for the years that follow.
Frequently asked
What we are asked about CFE and CVAE.
The answers cover foreign companies with premises in France, through a subsidiary or through an establishment.
CFE
Who owes the CFE?
Anyone habitually carrying on a self-employed business activity who has premises in France for that activity. The result for the year does not enter the calculation.
Is the CFE payable in the first year?
No. It is not due in the year the establishment is created, and the base is halved the following year. That reduction does not repeat.
Which return is filed, and when?
Form 1447-C, before 1 January of the year following creation. Without a return, the administration may set the base from the information it holds.
What if the company has no premises of its own?
A minimum charge applies where the rental value is low or nil. Its amount is set by the commune within a statutory scale, graded by the turnover of two years earlier.
When does the CFE fall due?
The balance on 15 December. Where an instalment applies, it falls in June. The assessment is not posted: it is made available in the online business account.
CVAE
Above what turnover is CVAE due?
Above 500 000 euros of turnover. Below that, no CVAE is payable.
Is the CVAE being abolished?
It ends in 2030. The 2025 finance act postponed the date, which had been set at 2027. Until then the maximum rate changes every year, and in 2026 it rises again first.
What is the cap on the local business contribution?
The contribution cannot exceed a set percentage of the value added produced. That percentage falls in steps to 1.25 % in 2030, the year the contribution reduces to the CFE alone.
Foreign companies
Does a warehouse alone trigger the CFE?
Yes, once the company has it at its disposal for its business activity. The question of a permanent establishment for income tax arises separately and turns on different criteria, as our page on remote work and permanent establishment sets out.
Does VAT registration bring the CFE with it?
No. A VAT number is not enough. What triggers the tax is having premises in France at the company’s disposal for a business activity.
How is the CFE paid from abroad?
Through the online tax account, which requires an open business account, a declared bank account and a valid mandate. Those three points belong in the preparation, not in the week the payment is due.
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Related work
Local taxes are prepared in the books and followed on the tax side. Two services take them on.
Next step
The initial return in the year
when nothing is payable.
A first conversation lists the premises, fixes the start date and prepares the 1447-C. We work in French, German and English.
- FRADECO SAS · Paris
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50, Rue Chapon · 75003 Paris
+33 1 40 09 13 77 - FRADECO GmbH · Bonn
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Simrockstr. 92 · 53619 Rheinbreitbach
+49 2224 123 14 83