The CFE (Cotisation Foncière des Entreprises) is a tax paid locally by companies with self-employed activities. In this article, we'll explain how to calculate it, what exemptions you can benefit from, and above all how to pay it. Thanks to us, this tax will no longer hold any secrets for you!
The CFE is a local tax paid by companies engaged in self-employed professional activity. This tax is part of the CET (Contribution Economique Territoriale), and acts as a substitute for the traditional taxe professionnelle. The CFE also applies to auto-entrepreneurs, on an equal footing with all other businesses.
Some activities are exempt from the CFE, such as craftsmen, public authorities and press agencies. But we'll come back to the activities exempt from the CFE in more detail below.
Three important elements are taken into account when calculating the CFE: the tax base, the rental value and the CFE rate. Don't know what these three points correspond to? Don't panic, we'll explain everything!
The tax base may vary according to the company's sales. In fact, this tax base is made up of the rental value of property subject to property tax. To calculate the rental value, you need to refer to the two years prior (N-2) to the tax year (N).
The CFE rate, on the other hand, is set by the local authority or inter-municipal cooperation body. Depending on the commune in which the company is located, this rate can fluctuate. Please note that the company must pay CFE in every commune where it has a physical presence.
This brings us to the final CFE calculation.
It couldn't be simpler!
CFE = Tax base x Rental value x CFE rate
Child's play, isn't it?
To calculate your CFE easily, try our free CFE simulator , quick and easy in less than 2 minutes!
The CFE provides exemptions for companies that meet certain criteria, such as the date the company was founded, the activity carried out, or other more specific cases. Let's get to the heart of the matter by providing all the necessary details.
At the start of their business, newly-created companies are exempt from CFE for the year of creation, i.e. from the date of creation to the following December 31. This applies to companies such as auto-entreprises. Then, a 50% rebate on the tax base will be applied for the second year of activity. A special case: lawyers, who can benefit from an exemption for the first three calendar years of their professional activity.
Another case: CFE exemption for zero sales
Indeed, if the auto-entrepreneur makes no sales in the tax year, he or she will be exempt from all CFE payments the following year. The same applies to businesses, but only if they have no employees.
It is also possible to be exempt from the CFE, depending on the activity carried out by the company. Craftsmen, cabs and ambulances are exempt from this tax. Some non-commercial activities, such as teaching science, literature or art, are also exempt. In certain cases, commercial and industrial activities may be eligible for this exemption. This is the case for press agencies and periodical publishers.
As the number of activities covered by the exemption is quite large, we invite you to find out more on the official websites to check whether your activity is exempt or not.
Depending on the zone in which the company is located, a total or temporary exemption may also apply. First of all, companies located in a BER (Bassin d'Emploi à Redynamiser) will be exempt from CFE for 5 years in the case of a business start-up, or for 5 years from the second year in the case of a business expansion. In the case of companies located in a QPPV (Quartier Prioritaire Politique de la Ville), no CFE will be due for the first 5 years of business. For the following 3 years, a degressive reduction will be applied. Finally, companies located in a ZRD (Zone de Restructuration de la Défense) can benefit from a total exemption from this tax for the first 5 years of creation or expansion.
Finally, other reductions are also planned for industrial establishments, with a 30% rebate on their tax base, or for structures located in Corsica, with a 25% rebate, or even seasonal activities that are totally exempt.
Prior to payment, the company must declare its taxable base by May at the latest. Payment will be made when the dematerialized tax notice is received by the commune.
There are two possible scenarios, depending on your company's sales. If your sales are less than 3,000 euros, payment will be made at the end of the year. If your sales equal or exceed this threshold, an advance payment of 50% is due on June 15, with the remainder due at the end of the year.
It is also possible for companies topay in ten monthly instalments from January to October. If you wish to take advantage of this option, make sure you apply to your local business tax office for monthly payment, as payment by instalment is applied by default.
It is important to respect these payment deadlines, as any delay may result in a 5% surcharge on the amount of the contribution, as well as interest of 0.40% per month of delay.
After this quick tour of the essential things you need to know about the CFE, you'll have a wealth of additional knowledge for your business!
Written by our expert Maeva Girardot
October 20, 2017
