The CFE (cotisation foncière des entreprises) is a local tax: all companies carrying out a non-salaried professional activity in France are liable for it;
CFE is calculated on the basis of the commune's tax rate, the value of the company's property subject to property tax, and the company's sales;
there are several CFE exemption schemes, which may be temporary or permanent;
exemptions vary according to several parameters: the company's legal status, its sector of activity, its location and its sales.
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The cotisation foncière des entreprises (CFE) is a local tax payable by all businesses, whether commercial, industrial or self-employed, as long as they carry out a non-salaried professional activity.
However, there are several CFE exemption schemes, which can be temporary or permanent.
These exemptions vary according to a number of parameters: the company's legal status, its business sector, its location and its sales. To find out about all existing exemptions and how to benefit from them, please read our article!
What is the CFE?
The cotisation foncière des entreprises (CFE) is a local tax due by all businesses, including micro-entrepreneurs, who are habitually engaged in a non-salaried professional activity on January 1 of the tax year. To find out more, our complete guide to the CFE for auto-entrepreneurs details the rules for calculation, reporting procedures and possible exemptions.
To be liable for CFE, the taxpayer's activity must meet the following criteria:
it must be carried out in France;
it must be of a habitual nature;
it must be carried out in a professional capacity;
she must be self-employed.
The companies concerned must therefore pay CFE regardless of their legal form, the nature of their business, their tax regime or their nationality. If you're wondering how to pay the CFE, or what the CFE declaration formalities are, you should know that there are several CFE exemption schemes, which may be temporary or permanent.
What are the CFE exemptions?
Certain companies may be exempt from payingCFE. These exemptions, whether permanent or temporary, may be automatic or optional (exemption on request, with the approval of the local authority). To find out how tooptimize your CFE and reduce your tax burden, consult our dedicated file.
Certain activities arepermanentlyexempt from CFE. The main activities concerned are listed below:
farmers ;
craftsmen working either for private individuals with materials supplied by them, or on their own account with materials belonging to them, whether or not they have a sign or a store, when they work alone or with the help of family labor or apprentices under 20 years of age under an apprenticeship contract;
cab or ambulance drivers who own one or two vehicles that they drive and manage themselves, provided that the 2 vehicles are not in service simultaneously, that they have no more than 7 seats and that the conditions of carriage comply with a statutory tariff;
fishermen, artisanal fishing companies and maritime registrants;
painters, sculptors, engravers and draughtsmen considered to be artists who create graphic and plastic works, and who sell only the product of their art;
photographer-authors, for their activities relating to photography and the transfer of their works of art or copyrights;
authors of literary, dramatic, musical and choreographic works, with the exception of software authors, as well as co-authors of audiovisual works, teachers of literature, science and the arts, and primary school teachers;
lyrical and dramatic artists;
midwives and nurses;
sportsmen and women for the sole purpose of practicing a sport;
the business of renting out or subletting furnished parts of one's main home, provided that the rented rooms are the tenant's or subletter's main residence, and that the rental price remains within reasonable limits;
rental of classified furnished tourist accommodation or bed and breakfast, provided that these premises form part of the owner's personal dwelling (main or secondary residence outside rental periods).
Temporary CFE exemptions
On the contrary, some exemptions are temporary and not intended to last over time. For example, companies are exempt from CFE for the first year of business, or when their sales are below a certain level.
Certain companies are also exempt when located in specific zones.
Exemption from CFE at start-up
New businesses are exempt from CFE for their first year of operation, i.e.from the date of creation to December 31 of the same year.
Secondly, companies benefit from a partial CFE exemption of 50% for the year following the year of creation.
This exemption is automatic.
Exemption from CFE due to low sales
Companies with annual sales of less than €5,000 are exempt from CFE. Sales are calculated over 12 consecutive months.
This exemption is automatic.
CFE exemption for companies located in certain zones
Depending on the zone in which it is located, a company may benefit from CFE exemption. Before making any decision, it is useful to examine the CFE rate in Paris (or that of the commune in question), as the relationship between CFE and domiciliation can strongly influence the final tax burden.
This exemption may automatically apply to all communes in a zone, or may require theapproval of the communities concerned. In general, these exemptions are temporary.
Here is a non-exhaustive list of zones that may give rise to CFE exemptions:
Zones d'aide à finalité régionale (ZAFR): total or partial exemption for a maximum of 5 years (based on deliberations by municipalities or EPCIs);
investment support zones for small and medium-sized businesses (ZAI): total or partial exemption for a maximum of 5 years (depending on the decision of the municipalities or EPCIs);
zones France ruralités revitalisation (ZFRR): total exemption for 5 years from the first year the company is created, or from the second year following expansion of the company, then degressive tax relief in the 6th year(75%), 7th year(50%) and 8th year(25%);
Priority urban districts (QPPV): total exemption for the first 5 years, then degressive rebate for companies created before December 31, 2025;
defense restructuring zones (ZRD): total exemption for the first 5 years following the creation of the company;
Bassins d'Emploi à Redynamiser (BER): 5-year exemption for companies located in a BER between January 1, 2007 and December 31, 2027 ;
zones franches d'activités (ZFA) in Guadeloupe, French Guiana, Martinique, Réunion and Mayotte: partial exemption for certain activities, with the approval of local authorities;
companies located in Corsica.
Other CFE exemptions
Certain specific activities are also eligible for CFE exemption:
rural doctors, medical auxiliaries and veterinary surgeons;
young innovative companies (JEI) and young university companies (JEU);
independent record shops (whose main activity is the retail sale of phonograms);
establishments selling new books at retail with the independent reference bookshop label;
To benefit from a CFE exemption, you need to apply to your company's local Service des Impôts des Entreprises (SIE). All you have to do is fill in the initial CFE declaration n°1447-C-SD sent by the tax authorities in your first year of business.
This form enables you toinform the tax authorities of your situation. In particular, this declaration is used to specify the nature of your business, the surface area of your premises and the CFE exemption you wish to apply for.
Good to know: The initial CFE declaration is compulsory and must be sent to your SIE before December 31 of the year your company is created.
When the CFE exemption applies to regional aid zones (ZAFR), investment aid zones for small and medium-sized enterprises (ZAI) and rural revitalization zones (ZRR), the company must also enclose a declaration no. 1465-SD.
When you're setting up a new business, it's essential to find out whether or not you're subject to the CFE. If you are, it's important to check whether you qualify for an exemption. It would be a shame not to!
To find out whether a company is exempt from CFE tax, simply contact the SIE (Service des Impôts des Entreprises), which can provide information on the exemptions applicable to your situation.
Who is eligible for CFE exemption?
Certain companies are exempt from CFE, depending on their situation. These include new companies, companies with annual sales of less than €5,000, companies located in certain zones, etc.
Who is liable for CFE?
All companies are liable for the CFE if they carry out a non-salaried professional activity in France on a regular basis.
