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France: Revised phase-down of corporate income tax rate, enacted

France: Revised phase-down of corporate income tax rate

The French government’s plan for a phase-down reduction of the rate of corporate income tax—ultimately to 25% in 2022— has been amended for 2019 for certain large corporate taxpayers. The modified tax rate phase-down schedule was signed by the president on 24 July 2019 and published in the official gazette on 25 July 2019. Thus, the legislation has been enacted.


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For financial years opened from 1 January to 31 December 2019, companies and tax-consolidated groups with a sales turnover of €250 million or more will remain subject to corporate income tax at the standard rate of 33⅓% (instead of the rate of 31% that applies for certain other companies).

The 28% standard rate will nevertheless apply—regardless of the sales turnover of the taxpayer—to the portion of taxable profit up to €500,000.

The chart below describes the rates of corporate income tax, currently and as enacted:

France: Corporate income tax chart

According to an anti-abuse mechanism, these new provisions will apply to 2019 financial years opened as from 1 January 2019 but closed as from 6 March 2019 (the date when there was public announcement of the measure).

The 3.3% surtax computed on the standard corporate income tax liability (after allowing a deduction of a lump-sum amount of €763,000) remains unaffected. Accordingly, the aggregated corporate income tax rates (including the surtax) are:

  • 33⅓% => 34.43%
  • 31% => 32.02%
  • 28% => 28.92%
  • 26.5% => 27.37%
  • 25% => 25.83%

KPMG observation

The tax authorities are soon expected to address the implications of these new provisions on the amount of the corporate income tax installments for 2019, since installments due 15 September and 15 December 2019 by companies and tax-consolidated groups with a turnover equal to or in excess of €250 million will be levied at the 33⅓% rate. 

Future rate measures

The French government also announced a new proposed modification to the schedule to reduce the corporate income tax rate in phases. This proposal is expected to be presented to the parliament during its fall session and as part of the discussion of the finance law for 2020.

It is anticipated that large taxpayers would be affected by any further slowdown of the corporate income tax rate reduction. For financial years opened as from 1 January 2020, companies and tax-consolidated group with a turnover equal to or greater than €250 million would be subject to corporate income tax at the standard rate of 31% (imposed on total profit amount) instead of the reduced rate of 28%.


For more information, contact a tax professional with KPMG Avocats in France:

Marie-Pierre Hôo | + 33 (0) 1 55 68 49 09 |

Patrick Seroin | + 33 (0) 1 55 68 48 02 |

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