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France: Proposed change to scheduled corporate income tax rate reduction

France: Scheduled corporate income tax rate reduction

The French government today released a draft law that proposes to amend the already enacted and scheduled reduction of the corporate income tax rate for certain “large companies.”


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The “standard” corporate income tax rate for 2019 had been reduced by the Finance Law for 2018 to 31% for financial years opened as from 1 January 2019, and with the first €500,000 of tax being subject to a 28% rate. Read TaxNewsFlash

As announced in December 2018, the French government proposed to restrict the 31% rate to companies with a turnover not exceeding €250 million. The applicable corporate income tax rate for taxpayers (or tax groups) with revenues over €250 million would be maintained at 33⅓ % for the amount of profits exceeding €500,000.

A “slowdown” for application of the corporate income tax rate reduction would not affect later financial years, and thus, the rates listed below would remain valid: 

  • 28% for financial years opened as from 1 January 2020
  • 26.5% for financial years opened as from 1 January 2021
  • 25% for financial years opened as from 1 January 2022. 

The 3.3% surtax computed on the standard corporate income tax liability (determined after a deduction of a lump-sum amount of €763,000) also would remain unaffected. Accordingly, the aggregated corporate income tax rates reflecting the surtax would be:

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


For more information, contact a tax professional with a KPMG member firm in France (KPMG Avocats):

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

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