CFE is a local business tax. It is to be paid by all businesses, regardless of the form (micro, EI or company), registered in France. The amount to be paid depends on where your business is registered, the surface of your business premises and the yearly revenue. The amount ranges from 223€ to several thousand, and is calculated according to a complex formula by the tax office.
What is CFE and how it is calculated
CFE (Cotisation Foncière des Entreprises) is a local business tax paid annually by most businesses operating in France. It is part of the Contribution Économique Territoriale (CET) and is collected by the local commune where your business is registered.
Even if you:
- work from home
- have no premises
- have low turnover
You will usually still have to pay CFE.
CFE applies to almost all business structures:
- Micro-entreprise
- Entreprise Individuelle (EI)
- Companies (SASU, SARL, etc.)
CFE is calculated according to a complex formula. The amount to be paid is determined by your local tax office and depends on:
- Your business location – each commune sets its own tax rate. This can be the reason for a sudden year-to-year change: your mocal authorities may have decided to change the rate. in some case this can be 2-3 times hike
- The rental value and surface of your premises (if none, there is a minimum rate that applies)
- Your revenue (not the exact amount, the rate increases by income brackets), on the N-2 basis meaning that in November of year N (2024 for example), the tax office is calculating the CFE based on information from year N-2 (that would be 2022 in our example), or on your revenue during the 1st and 2nd year of business.
Extemptions and reductions
Those with the annual turnover in N-2 less than 5000 euros are exonerated from this tax completely. There are other cases for permanent or temporary exemption (depending on your activity type and location), for example:
- for the first year
- If the revenue for the reference year was less than 5000€
- artisans without employees providing services at their clients’ homes only
- taxi drivers under certain conditions
- artists and authours
- businesses registered in certain areas
- micro entrepreneurs with turnover less than 5000€ in the reference year.
A reduction is applied to the base of calculations (rental value of property) in certain cases. You can find a full up-to-date list of extemptions and reductions in French here: https://www.service-public.fr/profession…/vosdroits/F23547
Declarations
During the first year of existence of your business, CFE is not paid, but you have to fill out two forms. After you register your business, you will receive an initial questionnaire from the tax office, that collects the basic information about your business for CFE purposes. This form needs to be filled out and sent to the tax office whithin 30 days. If you work from home, you need to estimate which floor surface is dedicated to your business. If you only work at your customers’, and never from home, you are allowed to declare “0”. In this case you will pay the minimum amount as per your location and revenue. You then need to file the initial declaration by the 31st of December of the first calendar year you are in business. Normally, the form will arrive py post to the registered address of your business in November. If not, you’re still obliged to declare and you can download it online from the tax website.
If you change your business address, you need to fill out the above declaration form, too.
Payment
Every year in middle to end of November you need to check this year’s CFE calculation. You will find a document detailing the calculations and the amount to be paid in your professional space on impots.gouv.fr website:
