Tax in France: The 2026 Guide for English-Speaking Business Owners
You run a business in France, or you are about to start one, and you need the big picture of tax in France: what exists, what it costs, when it is due. Most guides you will find online either show 2024 rates, cover personal taxes only, or explain the French system in French. This guide gives you the full map, in English, with the rates that apply in 2026.
Here is the short version. As a business owner in France, you personally face income tax (up to 45% in the top bracket) and social contributions. Your company faces corporate income tax at 25%, or 15% on its first EUR 42,500 of profit if it qualifies, plus VAT at 20% on most sales and local taxes. On top of that, real estate above EUR 1.3 million net triggers the wealth tax on real estate (IFI). The table below summarises what applies to whom.
Tax | Who pays | 2026 rate or threshold |
Income tax (IR) | Tax residents on worldwide income; non-residents on French-source income | 0% to 45%, progressive brackets |
Social contributions | Self-employed and salaried directors | Varies by status, no single rate |
Corporate income tax (IS) | Companies (SASU, SARL, SA) | 25%; 15% up to EUR 42,500 profit if eligible |
VAT (TVA) | Most businesses above the small-business threshold | 20% standard rate |
Local business taxes (CFE, CVAE) | Most businesses | CVAE above EUR 500,000 turnover, being phased down |
Real estate wealth tax (IFI) | Owners of real estate | Above EUR 1.3 million net |
Each line of this table has its own rules, thresholds and deadlines. The rest of this guide walks through them, in the order that matters when you operate a business: personal taxes first, company taxes second, wealth and property taxes third, deadlines last.
How the French tax system is organised
France has two tax layers, and understanding this split avoids most confusion.
The first layer is personal taxation. It is collected by the DGFiP (Direction générale des Finances publiques, the French tax administration) and organised around the tax household, called foyer fiscal. A household files one income tax return per year, combining salaries, dividends, rental income and other personal income. If you are a French tax resident, your worldwide income is taxable in France, subject to the tax treaty your country may have signed with France.
The second layer is business taxation. Depending on your legal structure, your business profit is either taxed directly at the company level (corporate income tax, IS, impôt sur les sociétés) or passed through to your personal return (sole traders and most transparent entities). On top of income taxation, companies handle VAT, local business taxes and payroll contributions.
One French habit surprises many foreign owners: withholding at the source, called prélèvement à la source, which has applied to salaries and most professional income since 2019. Your income tax is deducted monthly by your employer, your clients or your tax office before you receive the money, based on a rate computed from your previous return. You will see this rate, called taux de prélèvement, on your payslip or invoice statements.
Finally, note that French tax residents are defined by tests, not by nationality. Spending more than 183 days in France, having your main home or your core professional activity in France generally makes you a resident. Residency determines what you owe and where, so this is the first question to settle, ideally before you move or incorporate. Our guide to the French accountant's role explains how a licensed practitioner helps you structure this from day one.
Personal taxes: income tax and social contributions
The 2026 income tax brackets
French income tax is progressive: your income is sliced into brackets, and each slice is taxed at its own rate. The 2026 scale, which applies to 2025 income declared in spring 2026, is the following, according to the official service-public.fr scale:
2025 income bracket (per tax household share) | Tax rate |
Up to EUR 11,600 | 0% |
EUR 11,601 to 29,579 | 11% |
EUR 29,580 to 84,577 | 30% |
EUR 84,578 to 181,917 | 41% |
Above EUR 181,917 | 45% |
Two practical points. First, the brackets apply per share: a married couple has two shares, children add half shares, which lowers the effective rate. Second, these are marginal rates, not the rate on your whole income. A director earning EUR 60,000 does not pay 30% on everything, but 0%, 11% and 30% on the respective slices.
Dividends for owner-managers
If you operate through a company, dividends you pay yourself are taxed at a flat 12.8% income tax, plus 17.2% social levies, withheld at 30% in total at source, unless you elect the progressive scale instead. Choosing between salary and dividends is one of the core structuring decisions for a French owner-manager, and the right mix changes as profit grows.
Social contributions: no single rate
Social contributions fund health, family and pension schemes. Their cost depends on your status, and quoting one percentage would be misleading:
A salaried director (chairman or managing director of a SAS or SASU) pays employee contributions on salary, with the company adding employer contributions on top, so the total cost of a salary is significantly above its net amount.
A self-employed person (micro-entrepreneur or sole trader) pays contributions calculated on turnover or professional income, at rates that differ for services, trade and regulated professions.
A majority manager working in their own SARL falls under a hybrid scheme.
Because these rates are updated regularly and depend on your exact situation, we do not publish a single figure here. The official calculators on impots.gouv.fr give a reliable estimate for your status. If you employ staff, our payroll services in France guide covers the employer side in detail.
Business taxes: IS, VAT and local taxes
Corporate income tax: 25%, with a reduced 15% rate
Companies subject to IS pay 25% on their profits in 2026, according to the official scale on entreprendre.service-public.gouv.fr. A reduced rate of 15% applies to the first EUR 42,500 of profit for companies that meet two conditions: turnover of EUR 10 million or less in the accounting year, and share capital fully paid up and held at least 75% by individuals. Above EUR 42,500, the remainder is taxed at the normal 25% rate.
For a profitable SASU, this means the first EUR 42,500 of annual profit is taxed at 15% and the rest at 25%. The reduced rate is not automatic: the capital-structure conditions must be checked, particularly if a holding company or another legal entity holds shares.
VAT: 20% standard, with registration duties
VAT (value added tax, TVA in French) applies to most sales at a 20% standard rate, stable since 2014, with reduced rates for specific goods and services. If you sell to French customers or hold stock in France, you will charge and remit French VAT. How and when you register, and what a French VAT number looks like, is covered in our dedicated guide to the French VAT number.
Local business taxes: CFE and CVAE
Two local taxes apply to businesses. The CFE (cotisation foncière des entreprises, business property tax) is due by most businesses established in France, calculated on the rental value of premises, with an exemption in the first year of activity. The CVAE (cotisation sur la valeur ajoutée des entreprises, value-added contribution) applies to businesses with turnover above EUR 500,000, at effective rates between 0% and 0.19% in 2026, with a minimum contribution of EUR 63 for liable companies, according to the official CVAE page. The CVAE is being phased down, with reduced rates in 2026 and 2027 under the current legislative path.
Small business regime: the micro thresholds
Sole traders under the micro regime benefit from simplified accounting and turnover-based taxation, with 2026 ceilings of EUR 188,700 for sales activities and EUR 77,700 for services, as detailed on the official micro-entreprise page. Beyond these ceilings, the real regime applies, with full accounting obligations and VAT on actual figures. The micro regime is attractive at launch but becomes a constraint as you grow, since a flat percentage of turnover is deemed profit regardless of your actual costs.
Wealth and property taxes: what non-residents and investors should know
France taxes wealth narrowly: since 2018, only real estate is subject to a wealth tax, the IFI (impôt sur la fortune immobilière). It is due when your net real estate assets exceed EUR 1,300,000 on 1 January, as set out on the official IFI page, with rates from 0.5% to 1.5% on the value above the threshold. Non-residents are liable on their French real estate only.
Property ownership in France also carries annual local taxes (taxe foncière for owners, plus the housing surcharge on second homes for non-residents), and one-off taxes on purchase and sale. If you are not a French resident, two situations deserve specific planning:
Owning French property: the vacant-property and second-home surcharges changed for 2026, and our guide to the new French property tax for non-residents details what applies.
Selling French property: capital gains are taxed at 19% income tax plus 17.2% social levies, with exemptions after 22 and 30 years of holding, explained in our capital gains tax guide.
Inheritance is the third pillar: French forced-heirship rules and inheritance tax brackets apply to French assets, with treaties modifying the outcome for cross-border families. Our inheritance tax for non-residents guide maps the rules.
Deadlines and filings: the French tax calendar
French taxation follows a strict calendar, and missing a deadline costs penalties and interest. The main fixed points, for a calendar-year company:
April to June: personal income tax return, with online deadlines varying by department (late May to early June in practice for most filers).
May: balance payment of corporate income tax for the previous year, and the CVAE declaration for liable companies.
March, June, September, December: quarterly corporate income tax instalments (acomptes) for companies, when due.
Monthly or quarterly: VAT returns, depending on your regime; annual for small turnover under the simplified scheme.
Annually in May: real estate income and IFI declaration, filed with the income tax return.
The tax year itself matches the calendar year for individuals; companies can use a custom accounting year-end, which shifts their own deadlines accordingly. Withholding at the source smooths income tax across the year, but the annual return remains mandatory even when everything was already withheld.
If this calendar feels dense, it is because it is. Most foreign owners underestimate the number of filings involved in running a French entity: VAT, payroll, instalments, annual accounts, local taxes. The practical answer is to set up a compliance calendar when you start, and to have someone accountable for each filing.
What to do now
You now have the full map of French taxation: personal income tax up to 45%, social contributions by status, corporate tax at 25% with the 15% reduced rate, VAT at 20%, local taxes, and the real estate wealth tax above EUR 1.3 million. Three questions determine your actual obligations:
Are you a French tax resident? This sets what you declare and where.
What is your business structure? Company, sole trader or micro regime, each carries its own tax and filing logic.
Do you hold French real estate? This adds IFI, local taxes and inheritance considerations.
Answering these three questions precisely, with rates and deadlines attached to your situation rather than averages, is exactly what a chartered accountant does. GME Audit is a Paris-based firm led by Steeve Elharrar, a licensed expert-comptable and statutory auditor, former KPMG and Deloitte, working in French and English with owners and investors across France. Ask for a quote, and you will get a precise answer on your tax exposure in France, not a generic one.
This guide is general information, not tax advice. Rates and thresholds are those in force in 2026 and change with finance laws; verify them or ask before deciding.
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