FREQUENTLY ASKED QUESTIONS

Accounting Records

Q: What accounting records do I need to keep for my French business?

A: Accounting records should use the legally required Chart of Accounts (accounts code), should be maintained on a day-to-day basis, and should always be available for inspection by an authorised agent of the state. Certain registers resuming accounts and accounting entries are compulsory.


Employment

Q: As a foreign registered company can I employ someone in France?

A: Yes, but if you don't want to set up a subsidiary or a separately registered branch, then you must appoint a person to be responsible for the collecting of social security contributions -if you default, he or she is personally liable to pay.


Q: At what rate on wages are employer's social security costs?

A: It will depend on the category of the employee (these are rigidly codified, and this codification determines the level of welfare cover and contributions and minimum wage levels, severance pay, etc), but, if no special employment aid is available, then you can count on oncost of about 45 to 47 percent.


Q: How are employment costs paid over?

A: There are separate agencies for each aspect of welfare (state sickness benefit, health care and pensions, unemployment benefit and supplementary pension and health cover), and each is contributed to separately on a monthly (for larger businesses), quarterly or annual bases.


Company Taxation

Q: At what rate is Corporation Tax charged?

A: Corporation Tax is at 33 1/3 per cent of assessable profits, to which is currently added a surcharge of 3 per cent of the tax charged. A small business rate of 15 per cent exists on a proportion of such businesses' profits.


Q: When is Corporation Tax paid?

A: Corporation Tax is paid on an estimated basis in the third, sixth, ninth and twelfth month of a company's fiscal year on the profits of the current year. Underpayments are paid over in the fourth month of the following year, and overpayments may be set off against the first payments in respect of the new year.


Q: At what rate is Value Added Tax charged?

A: The standard rate is 19.6%, but a reduced rate of 5.5% exists on certain products. Certain transactions, such as exports, are exempt, but special rules exist for sales within the European Union.


Q: When is VAT paid over or recoverable?

A: Declarations and payments are made every quarter (monthly for larger companies) within the month following the end of the quarter. Refund of excess input tax can be claimed, and this takes about three months.


Q: Must I register my business for Value Added Tax?

A: Unless your business is in a special category, you will have to register it for VAT if your annual sales are in excess of 76300 Euros (goods) or 27000 Euros (services).


Q: What other taxes is my business likely to be liable for?

A: There are a variety of small taxes and parafiscal levies, but the most important is the "Taxe Professionnelle" or Business tax, the basis of assessment to which is the theoretical rental income which your business premises could generate. Rates of assessment are locally determined, based on the funding requirements of the local authority.

For more information on any of the above please click here