Business Tax in France: Your Comprehensive Guide to the CFE Tax

Don't get caught out at the end of the year!

If you’re running a business in France, whether it’s a small property rental activity, a local shop, or a professional service, you will more than likely have come across the CFE (Cotisation Foncière des Entreprises) tax. Understanding how it works, who pays it, and when, will help you avoid nasty surprises at the end of the year.

What is the CFE tax?

The CFE tax is a local business tax that applies to most companies and self-employed individuals. More specifically, it is a tax on the premises your business uses and it applies whether you own or rent your workspace. Even if you don’t have dedicated premises, most registered businesses still fall under the scope of the CFE tax.

Registering for the CFE tax

When you set up a business in France, under any one of the many regimes that are available, the information you provide to the Centre de Formalités des Entreprises (CFE - confusingly the same acronym!) is automatically passed to the local tax office that deals with business tax, known as the Service des Impôts des Entreprises (SIE).

In the year that you create your business, you have to make an initial declaration to the tax office using this form, before 31 December. They then use the information you have provided to determine the rate at which you will pay CFE tax. In subsequent years, you generally don’t need to refile, unless something changes, such as new premises, relocation or major modifications to the use of space, or if you wish to close the business.

How the CFE tax is calculated

The CFE tax calculation is based on the rental value of the premises your business uses, as assessed by the tax authorities and using the figures from 2 years previously (N-2). So for example to calculate the tax due for the year 2025, the tax authorities would use the rental value for the year 2023 in their calculations.

If you work from home and you don’t have professional premises, your CFE tax is generally based on a minimum contribution, which varies by commune. For example:

• In a small town, the minimum CFE tax might be around 200€-500€

• In a larger city, it can easily reach 1,000€+ per year.

Who has to pay the CFE tax?

Almost every business activity registered in France is liable for CFE, including:

• Companies (SARL, EIRL, SAS, SCI, etc.)

• Entreprises Individuelles, including micro-entrepreneurs (formerly know as auto-entrepreneurs) 

• Professionals working from home (yes, even without an office, unless exempt)

• Property rental businesses such as furnished rentals (location meublée) or seasonal rentals (location saisonnière)

Exemptions and reductions

Not all businesses have to pay CFE tax. Some key exemptions include:

• First year of activity: All new businesses are exempt from CFE tax in their first year, between the date they register and 31 December

• Small turnover exemption: Since 2019, businesses with less than 5,000€ in annual turnover are exempt

• Certain professions: Some activities such as artists, agricultural businesses, teachers giving private lessons, and a several others may benefit from permanent exemptions

• Temporary exemptions: Local councils can also grant relief for new businesses

  or in specific zones

When and how to pay CFE tax

The CFE tax has to be paid in December each year. A notice is issued in November, but note that this is not sent by post, it is only available in your online professional space on the tax office website. You will find more details on how to set this up below.

Payment can only be made online via your professional space on the tax office website. Paper payments are not accepted.

If your CFE exceeds 3,000€, you will be required to pay half in May/June, with the balance due in December.

Payment can also be made by monthly direct debit or 'prélèvelment mensuel' in 10 installments between January and October with an adjustment in December. If you wish to do this, you must opt-in, via your online professional space, by 15 June.

Setting up your online professional space

As the CFE tax is a 'paperless' tax, you will need to set up your online professional space, so that you will be able to access your CFE tax bills and pay them before the given deadline, to avoid late payment penalty charges.

Click here to access the relevant page of the tax office website. Next, click on 'créer mon espace professionnel' and then click on 'créez votre espace en mode simplifié'. This will open up a new page and you will need to enter your SIREN and all your contact details. Once you have done this, an activation code will be generated and sent to you in the post. This usually takes a couple of weeks to arrive. Once you have received that, you can go back onto the same page of the website and click on 'activer mon espace/mes services' and follow the steps on the screen.

Practical Tips

Check your account: Your CFE bill will not arrive by post - it’s only available online

• Budget for it: Many small businesses forget to set money aside and get caught out in December

• Ask about exemptions: If you think your activity might qualify or if you think you are being charged too much, contact your local tax office (Service des Impôts des Entreprises)

• Keep your details up-to-date: If you move, change premises, or work only from home, declare it promptly to avoid overpaying

Key Takeaways

The CFE tax is a local business tax based on your premises

• Almost all businesses must pay it, but there are exemptions for new or very small activities

• It has to be either paid online, or monthly, both of which have to be set up via your online professional space

• Amounts vary widely depending on your location, from a few hundred euros to several thousand

If you are struggling with anything relating to CFE tax or business registration, please feel free to contact me and I will be delighted to help you navigate your way through the bureaucracy!