The tax year is generally the calendar year, although the taxpayer may elect a tax year other than the calendar year. The tax year is 12 months but can be shorter or longer in certain cases.
A self-assessment regime applies. Corporate income tax returns are normally due by the second business day after 1 May of the following year, where the financial year corresponds to the calendar year. Otherwise, the return is due within 3 months from the closing of the financial year.
The taxpayer is required to file the corporate tax return, and proceed with payment of tax on a dedicated subscriber-only space on the website of the Revenue (www.impots.gouv.fr)
Unlike the individual income tax, corporate income tax must be paid by companies subject thereto without receipt of a payment notice from the tax administration. Corporate income tax is payable to the income tax collector in four installments no later than the fifteenth day of the months of March, June, September, and December (depending on when the fiscal year of the taxpayer closed). The amount of each periodic installment, except for the first one, is calculated on the basis of the taxable income realized by the taxpayer during the preceding taxable year (hereinafter: the Reference Year). Inasmuch as the definitive income tax due is still unknown at the time the first installment is due, the amount of the first installment is based on the taxable income earned during the tax year preceding the Reference Year. When the second installment is paid, the amount of the first installment is re-calculated on the basis of the tax return which, by that time, will have been filed for the Reference Year; the amount of any underpayment or overpayment of the first installment is paid together with or taken as a credit against the second installment.
Large companies with revenue exceeding EUR 250 million are required to calculate and pay the final corporate tax installment payment as follows:
- Revenue up to EUR 1 billion - 95% of the estimated tax liability for the year, less installments already paid (increased from 80% effective from 1 January 2019);
- Revenue over EUR 1 billion up to EUR 5 billion - 98% of the estimated tax liability for the year, less installments already paid (increased from 90% effective from 1 January 2019); and
- Revenue over EUR 5 Billion - 98% of the estimated tax liability for the year, less installments already paid.
During their first fiscal or taxable year, newly incorporated companies are exempt from the obligation to pay tax in four installments. Instead, such companies may pay the tax due in one payment at the moment of filing their corporate income tax return.
If the four installments do not entirely satisfy the tax liability for the year, the taxpayer is required to make a final balance payment by the 15th day of the fourth month following the close of the fiscal year. If no fiscal year was closed during a calendar year, payment must be made no later than 15 May of the following year.
In the event that the four installments exceed the taxpayer’s total tax liability, the tax administration must, within thirty days of the filing date of the tax return, refund such excess net of any other direct taxes which may be owed by the taxpayer. The taxpayer may elect to request the tax administration to credit any refund owing to it to against its tax liability for the following tax year. Where the turnover, net of tax, of the preceding fiscal year exceeded EUR 760,000, the taxpayer must pay the amount due by means of a direct transfer ("virement") to the account of the Treasury at the Bank of France. Failure to do so is sanctioned by a penalty equal to 0.2% of the amount paid by other means.
In response to the COVID-19 pandemic, France introduced new beneficial relaxations with respect to instalment adjustments and allowed margin of error as follows:
- The 1st instalment payment due by 15 March 2021 can be adjusted to at least 25% of the forecast corporate tax payment of the fiscal year ending on 31 December 2020, with a margin of error of 10%; and
- The 2nd instalment payment due by 15 June 2021 can be adjusted so that the sum of the 1st and 2nd instalments corresponds to at least 50% of the corporate tax due for the fiscal year ending 31 December 2020.
To avail the above benefits, large companies with more than 5000 employees or EUR 1.5 billion in turnover are required to make the following commitments:
- No dividend distributions or share buy-backs will be undertaken in 2021; and
- The head office or subsidiary without economic substance is not located in a non-cooperative country or territory (see Sec. 13.5. for the list of non-cooperative jurisdictions).
Further, companies which benefit from one or more refundable tax credits in 2021 can claim a refund prior to the filing of the tax return (see Sec. 10.4. and Sec. 10.5. for information on tax credits).