The CFE (Cotisation Foncière des Entreprises) is a local tax that all businesses have to pay every year. Since it's not always easy to understand what this tax actually means, and whether or not it applies to you, this article will help clarify the issue. Indeed, while most companies are liable to pay it, some may also benefit from an exemption.
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CFE is one of the best-known of all the charges levied on entrepreneurs. And yet, its rules are not always easy to adopt. To put it plainly, the CFE acts as a business tax for all companies engaged in non-salaried activity. Even auto-entrepreneurs are concerned, but only from the second year of operation.
Along with the CVAE (Cotisation sur Valeur Ajoutée des Entreprises), the CFE is part of the CET (Contribution Economique Territoriale). All businesses must pay CFE in each commune where they have a physical presence. The CFE is calculated on the basis of the company's real-estate taxable assets, and can therefore vary according to the commune in which the company is located.
In certain specific cases, companies may be exempt from the CFE, so read on to find out more.
To ease the cash flow of certain businesses, the French government has introduced CFE exemptions for companies meeting certain criteria.
Are you eligible for CFE exemptions? We tell you everything!
Firstly, new businesses or auto-entreprises can take advantage of an exemption in the first year of creation. Then, a 50% rebate is applied from the second year onwards. The only exception is lawyers, who are totally exempt for the first three years of business.
So, if your company has no sales during the tax year, you won't have to pay a cent of CFE the following year. This applies to self-employed businesses and companies with no employees.
Depending on your company's activity , you may also qualify for an exemption. This applies to craftsmen, cabs and ambulances, as well as certain non-commercial activities such as teaching literature or art. Commercial and industrial activities such as press agencies and publishers of periodicals are also eligible.
A wide range of activities are eligible for CFE exemption, so we advise you to check the official websites to see whether your profession is eligible or not.
Depending on the zone in which your business is located, you may be eligible for a temporary or total exemption. Businesses located in a BER (Bassin d'Emploi à Redynamiser) or a ZRD (Zone de Restructuration de la Défense) will be exempt from CFE tax for 5 years from the year of creation. Companies located in a QPPV (Quartier Prioritaire Politique de la Ville) will benefit from the same advantage, followed by a degressive rebate for the next 3 years.
Last but not least, industrial structures will also benefit from exemptions, with a 30% reduction in the tax base. Corsican companies benefit from a 25% discount, while all seasonal activities are fully exempt.
When you set up your company, it's essential to find out whether or not you are subject to the CFE. If you are, find out whether you are eligible for an exemption. It would be a shame not to!
Written by our expert Maeva Girardot
November 3, 2017
