Recently, France has implemented several tax reforms to improve its attractiveness at international level.
Finance Law for 2018 and Amending Finance Law for 2017 are evidence of this ambition to consider France as a better tax land.
Hence, tax incentive measures are planned in France for both companies and individuals.
Taxation of companies
Reduction of the Corporate Income Tax rate (CIT)
A progressive decrease of the Corporate Income Tax rate is set up to reach 25% in 2022.
Low taxation of dividends
The dividends received by a parent company from its subsidiary are 95% tax exempt (effective tax rate at 1.72% decreasing to 1.29%).
Carry-forward tax losses indefinitely
Tax losses realised by French companies can be carried forward indefinitely.
Preferential Tax Regime for capital gains on the disposal of industrial intangible assets
Under conditions, long-term capital gains (more than 2 years) on the disposal of industrial intangible assets, such as patents and industrial manufacturing processes, are taxed at a reduced rate (15%).
Long-term capital gains taxed at a reduced rate for companies subject to individual income tax
Long-term capital gains (more than 2 years) realized by companies subject to individual income tax are taxed at a reduced rate of 12.8%.
Attractive Research Tax Credit
Companies that invest in Research & Development can benefit from a Research Tax Credit equal to 30% of research costs engaged.
Favourable regime of young innovative enterprise
The regime of young innovative enterprise allows benefiting from social and tax exemptions and can be combined with the Research Tax Credit.
Transfer Pricing agreement practice with French Tax Authorities
An Advance Pricing Agreement can be granted by the French Tax Authorities to secure a transfer pricing policy for a 5-year period.
Simplification for declaring and paying CIT on-line
Decrease of the administrative burden for companies thanks to the declaration and payment of taxes on-line especially for post-declaration procedures including VAT.
Taxation of individuals
Preferential Tax Regime for impatriates in France
Some tax exemptions for impatriates in France.
Reduction of the withholding tax
A progressive decrease of the withholding tax on some non-wage income to reach 25% in 2022.