Exemption for all businesses in their first year of activity
The Corporate Business Tax (La Cotisation Foncière des Entreprises or CFE) is a tax that is based on the value of any and all of the real estate property associated with the business (e.g. a storage space, a studio, an office, a shop, etc.).
All businesses are subject to this tax, no matter their size nor their tax regime, even if they don’t have property dedicated to their business.
For example, independent contractors who work from home are also subject to CFE.
The good news is all companies are exempt from this tax during the first year of activity.
But, be careful - in order to qualify for this exemption, you must send on this initial CFE declaration form to your assigned corporate tax center
(service des impôts des entreprises
Conditional extended CFE exemption
In some instances, it’s possible to qualify for an indefinite exemption from corporate property tax. In order to quality, your business must fulfil one or more of the following conditions:
- your pre-tax revenue is under €5,000;
- your business activity falls within one of the following categories: - taxi driver, ride-hailing driver or ambulance driver and you own one or two cars for business purposes;
- agricultural worker;
- independent door-to-door salesperson with a gross annual pay of less than €6,787;
- company producing biogas, electricity or heat by methanization;
- professional artist (painters, photographers, sculptors, engravers etc.);
- independent teachers of science or the arts;
- entrepreneurs wishing to open an independent reference library (or libraries with a public premises and a turnover made up of at least 50% of new book sales);
- specialist newsagents;
- subsidized housing organizations and property owners or renters who let or sub-let a part of their home on an occasional basis;
- people who rent out part of their personal home for tourism purposes (bed & breakfast, gîte or guesthouses).
Is your business located in a priority neighborhood (QPV) and its base taxable income is below €29,886 (for 2022)? You can qualify for a complete exemption for 5 years, with subsequent tax abatements of:
- 60% in the sixth year;
- 40% in the seventh year;
- 20% in the eighth year.
To apply for this exemption, you must send your request to the business tax office (Service des Impôts des Entreprises - SIE) along with an explanation of the request.