Tips and tricks to reduce corporate tax in France

Reducing corporate tax in France

It’s no secret that France can have a pretty high corporate tax. Granted, it doesn’t apply until your company actually makes a profit, but 30% is still a lot.
Thankfully, you do have a few options to reduce the amount you have to pay!

Increase the remuneration of the legal representative

In France, the remuneration of the legal representative is a “tax-deductible expense”. In other words, the higher it is, since you don’t pay corporate tax on it, the higher it is, the less tax you pay! The same principle applies when you give bonuses to your employees.

However, this also means that you’ll pay more social contributions, so this is something that should be analyzed carefully.

Deduct your losses from your profits

When creating a company, it’s likely that you’re going to lose money at least the first couple of years, before you start making a profit. In France, you can use that to your advantage; by deducting your losses from your profits on your financial result, you can effectively lower the amount of profit you have to pay taxes on!

The only thing you should keep in mind is that there is a limit to how much you can deduct from your profits in a given year.

Use Tax credits

There are actually a lot of tax credits in France that your company could benefit from! If you want to learn more about them, here’s a list of Subsidies and tax credits for company creators in France.

Look over your options with your chartered accountant

Of course, having your accountant oversee all of this is definitely the best course of action. After all, knowing the ins and outs of the French tax system is part of their jobs, so there’s no reason not to consult them!

Don’t have an accountant? Learn about why you should have an accountant!

There are actually more options, such as investing, subscribing to insurance, compensating the equity of your company… Making sure you know about all of your options is actually another reason why you’d want an accountant!

Though, thanks to the new French President Emmanuel Macron, tax rates are actually going to get lower. Indeed, corporate tax is going from 33% to 25%!