A company'sregistered address enables :

  • Administrative domiciliation,
  • Tax domicile.

The address you choose is likely to have a major impact on your tax base, particularly in terms of local taxes. Any change of address must therefore be systematically recorded in the company's articles of association.

What are the principles of corporate taxation in France?

Two principles govern the taxation of profits in France:

  • The principle of territoriality: this applies to all profits made in France by a company subject to corporate income tax.
  • The "mondialité" principle: for companies subject to income tax, this principle applies to all worldwide income.

The principle of tax territoriality therefore excludes not only profits, but also losses, made abroad, provided that these activities are of such importance that they resemble in every respect the activity of a company operating abroad.

This means that the principle of territoriality can exclude foreign branches of a French company from French corporate income tax, even if the accounting is carried out in France.

What are the criteria for domiciling a company for tax purposes?

When you set up your company, your choice of registered address is what constitutes your company's "registered office". It determines the law applicable to the company in the event of litigation, as well as the applicable tax regime.

Three criteria enable the tax authorities to consider that your tax domicile is in France:

  • French home address or main place of residence,
  • Principal occupation,
  • Have the center of its economic interests in France.

These three criteria are not cumulative. If you meet just one of these criteria, you are taxable in France.

Where do you set up your tax domicile?

Your company's administrative address is also your tax address. It is therefore important to determine where you can domicile your company.

Domiciliation at the home of the legal representative

This solution is generally the one preferred by entrepreneurs when setting up their business. The reasons are as follows:

  • It's simple,
  • It's economical.

However, it also has significant disadvantages:

  • Lack of credibility,
  • No distinction between private and professional life.

The first point is surely the most crippling, since it will have a direct impact on the profits you can expect to make from your business.

Domiciliation in commercial premises

This solution is widely used, particularly when your business requires the use of leased commercial premises, or premises belonging to the company you operate.

In this case, the administrative and tax address indicated by the partners in the Articles of Association will generally be the address of the premises.

Domiciliation in a company nursery or incubator

This is a form of collective domiciliation, i.e. it will be shared by several companies, who will share the resources made available to them by the business incubator.

The problem is that domiciliation in a structure of this type is not permanent. It rarely lasts longer than six months, which means that the company's articles of association have to be amended, and this entails costs.

Domiciliation in a coworking space

This form of domiciliation is often referred to as "business colocation". In other words, several companies rent the same professional space.

The aim is to benefit from resources that will be shared by all tenant companies.

Business tenants can choose the address of the coworking space as their registered address.

Commercial domiciliation

This type of domiciliation requires the use of a domiciliation company. You choose an address from a list of cities and neighborhoods proposed by the company.

Sedomicilier.fr offers more than thirty cities where you can locate your head office at the address of your choice. The advantage of these companies is that they give you access to prestigious addresses such as the Champs-Elysées or La Défense.

We also offer a wide range of services, including legal assistance, switchboard services, and office and meeting room rentals.

This wide choice of addresses also enables you to compare local tax bases, which can vary from one commune to another.

Choosing to domicile your business abroad

When, in your company's first profitable year, you realize that between collecting VAT (which, in a globalized economy, is often deducted from your sales price) and corporate income tax, you have had to pay back 50% of your profits to the tax authorities, the idea of domiciling your company abroad will start to gain ground.

If, in addition, you have invested part of your profits in the stock market, you will find that when you withdraw your assets, your tax rate will rise to 60%, which corresponds to the addition of income tax (12.8%), social security contributions (17.2%) and corporate income tax (30%).

Seized by a desire to move elsewhere, you're thinking of packing up your company's head office. To do this, you need to :

  • Inform your CFE (Centre de Formalités des Entreprises),
  • Inform the French tax authorities,
  • No longer qualify as a French tax domicile.
  • Seek the assistance of a tax lawyer.

This last point is by far the most important. If you have decided to continue to live in France, and not lose your clientele and all the professional infrastructure that goes with it, you' re going to have to find a top-notch tax lawyer. Otherwise, the tax authorities will penalize you severely for tax evasion.

Conclusion

Theaddress of your company's head office determines the basis of your taxation, particularly local tax rates. To get the full picture, it's important to get legal help as soon as you set up your company.

An advisor will be able to suggest the solutions best suited to your needs. You'll be able to choose your legal form, as well as your registered address, all the while being aware of the administrative obligations that will accompany the life of your company.

One of the many services offered by Sedomicilier.fr is a team of advisors to help you with all your needs.