What is the CFE?

The CFE, or cotisation foncière des entreprises, was created by the 2010 Finance Act. It is based on the rental value of taxable real estate used by the company for its business activities. It is a local tax. The CFE, together with the CVAE (Cotisation sur la valeur ajoutée des entreprises), make up the Contribution économique territoriale (CET). CFE payments by businesses are used to finance local authorities and public establishments for inter-communal cooperation. 

The CFE applies to all businesses, regardless of their tax status. It is payable by : 

  • Companies (SAS, SARL, SASU, EURL)
  • The SCI
  • Self-employed (Auto-entrepreneur, EI, liberal) 
  • Profit-making associations

All activities are covered by the CFE system, provided they are carried out on a regular, professional basis. 

CFE exemptions 

Several provisions provide forCFE exemption. Since 2019, companies with annual sales of less than €5,000 excluding VAT have benefited from total exemption. This is a particularly attractive provision for those benefiting from microentrepreneur status. In addition, companies are exempt from CFE tax for the first year following their creation. There are two types of CFE exemption. 

Partial exemptions

In their second year of business, companies and self-employed entrepreneurs benefit from a 50% exemption. Businesses with seasonal activities, such as hotels, restaurants and certain theme parks, can benefit from a partial exemption from business property tax. The contribution is calculated on the basis of the period of inactivity. 

Partial exemptions apply to craftsmen with one or more employees:

  • One employee: 75% discount 
  • Two employees: 50% discount 
  • Three employees: 75% discount 

Companies and micro-businesses based in Corsica benefit from a systematic 25% allowance.

Temporary exemptions

Companies constructing or extending buildings for their activities are exempt from CFE tax for a period of 3 years. Specific geographical areas allow companies to benefit from a temporary exemption: 

  • ZRD: Zone de restructuration de la défense (Defense Restructuring Zone) 
  • QPP: Quartier prioritaire de la politique de la ville (Priority neighbourhood for urban policy) 
  • BER: Bassin d'emploi à redynamiser (employment area to be revitalized)

Permanent exemptions 

A permanent exemption applies to specific non-commercial activities. This applies in particular to private educational establishments, sports facilities and companies or associations involved in artistic activities. 

Self-employed entrepreneurs working in a craft business can benefit from a permanent exemption. Publishers of periodicals and press agencies are eligible for CFE exemption. 

Making your CFE declaration 

Professionals do not need to take any steps to declare their CFE. Only requests for exemption must be declared. When a major change occurs in the operation of a company or micro-business, it can have an impact on the CFE calculation: 

  • Increase/decrease in floor space 
  • Opening / closing a facility 
  • A craftsman drawing up a new employment contract for an employee

It is therefore advisable to notify the tax authorities of these changes in order to modify the CFE calculation. The declaration is made using the amending declaration form 1447-M-SD. The request must be submitted before the second working day following May 1st. 

How do you calculate the amount of your CFE?

The CFE calculation takes into account a number of criteria, including whether or not a premises exists. 

Companies with premises

The CFE contribution varies according to each commune. It is calculated on the basis of the rental value of the real estate used by the company for its commercial activities. The rental value is determined on the basis of the estimate that these properties could bring in if they were let on the real estate market. 

For calculate his CFEcan be calculated using the following formula : 

CFE amount = (Property rental value x Local tax rate) + Additional tax + Management fees. 

To fully understand this formula, it is important to note the following information: 

  • Rental value of property: CFE is calculated on the basis of the rental value of property subject to property tax, based on the year n-2.
  • Municipal tax rate: this varies from one municipality to another, and is applied to the rental value to obtain the CFE amount. 
  • Additional tax : this is set at 0.89% of the CFE and is paid to the CCI France and its regional branches. 
  • Administration costs: these are costs linked to local taxation. They represent around 1% of the total amount of the CFE, including the additional tax. Management fees cover the operating costs associated with the administrative processing of the CFE. 

All companies liable for CFE are required to pay aminimum contribution. This is calculated on the basis of the minimum tax rate set by the municipality. This base is determined by the municipal council. It varies according to the company's sales in year n-2.   

Businesses without premises

Companies that do not have their own premises dedicated to their business activities have a tax obligation linked to the CFE. Contractors working from home or visiting their customers are subject to a different calculation method. 

To calculate the CFE for a business without premises, the authorities base their calculations on sales generated in year n-2. The amount of the CFE for a business without premises varies according to several sales brackets. Each commune is free to set its own rate. As a result, rates can vary considerably from one commune to another.  

To calculate your CFE in less than 5 minutes, we've developed an online CFE simulator.

Optimize your CFE with domiciliation

Choosing a domiciliation company to optimize your CFE is an excellent solution. The location of your business premises or your home where your company's head office is located can have a significant impact on the calculation of your CFE.

By choosing a domiciliation company like Sedomicilier to set up your head office, you have an excellent solution for optimizing the cost of your CFE. Domiciliation is an advantageous strategy for companies wishing to reduce the cost of their property taxes.

How to pay your CFE?

Payment of the cotisation foncière des entreprises is due by December 15 of each year. For professionals, payment is made from your online account at impots.gouv.fr. It is possible to pay the CFE by monthly instalment. The online tax service enables entrepreneurs to formalize their request for monthly CFE payments.

Companies whose CFE amounted to more than 3,000 euros the previous year are required to pay a 50% deposit by June 15 of the current year.