EssentialCFE: understanding the French local business tax
The CFE local business tax: who pays it, how it is calculated and which exemptions exist.
Business taxation
Business taxation combines several taxes with distinct rules: CFE, VAT, BIC or corporate tax depending on the chosen legal structure. This section explains each deadline with its key dates and special cases.
The articles cover how the CFE local business tax is calculated and its exemptions, the choice between standard and simplified VAT regimes, and the practical differences between income tax (BIC) and corporate tax.
The preferred sources are impots.gouv.fr and the official tax bulletin (BOFiP), reviewed annually after each finance law, since rates, thresholds and allowances are regularly adjusted.
The essentials
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CFE: understanding the French local business tax
The CFE local business tax: who pays it, how it is calculated and which exemptions exist.
Read moreFrequently asked questions
What is the CFE local business tax and who must pay it?
The CFE (cotisation foncière des entreprises) is owed by most businesses and self-employed people operating in France as of January 1st, based on the rental value of the premises used. It is payable in December, with a possible exemption in the first year.
What is the difference between BIC and corporate tax?
BIC (industrial and commercial profits) concerns the income-tax treatment of sole traders, while corporate tax (IS) applies to companies subject to that regime, with a standard rate of 25% in 2026.
How does VAT work for a business?
The business charges VAT to its customers, deducts the VAT paid on its business purchases, and remits the difference to the tax authorities on a monthly, quarterly or annual basis depending on its regime.