Import Procedures

For goods valued at under 1,000 kg or EUR 1,000, a verbal declaration at customs and presentation of the receipt of purchase is sufficient.
Higher-valued must be declared at the Customs Office:
1) a brief declaration (air or maritime manifest) to conclude the collection of the goods.
2) a common law declaration (SAD, single administrative document), as well as the accompanying documents to allow their clearance.
The SAD form can be obtained from Chambers of Commerce or an approved printer.

An online clearance platform by automated transmission (DELTA) is accessible from the The portal of the General Directorate of Customs and Indirect Taxes (in French).

In the case of deliveries and purchases within the European Community, the declaration of exchange of goods (DEB) or Intrastat declaration must be sent to the Customs Service.

As part of the 'SAFE' standards advocated by the World Customs Organisation (WCO), the European Union has set up a new system of import controls, the 'Import Control System' (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Programme eCustoms, has been in effect since 1 January 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.

The Modernised Customs Code entered into force in 2008 simplifies procedures, for example computerising and centralising transactions.

Since 1 July 2009, all companies established outside of the EU are required to have an Economic Operator Registration and Identification (EORI) number if they wish to submit a customs declaration or an Entry/Exit Summary declaration. For more information, please visit the website of the EU Customs Union. For France-specific customs clearance requirements, please visit the the website of the French Customs (in French).

Specific Import Procedures

There are various suspensive systems, both Customs and Fiscal, for storing, using or transforming your goods, consult the pages of the French Customs website devoted to these questions for further information. It is also possible to resort to bonded transit covered by an external transit certificate (T1). In the framework of intra-European trade, some goods are still prohibited or subject to particular formalities (medicines for human use, waste, plants or live animals). For further information, please visit the website of the French Customs (in French).

Distribution channels

According to USDA’s Report Retail Foods 2021, in 2020, the largest French retailers continued investing in smaller stores in city centers. The overall retail food sales in France were estimated to $394 billion, and specialized food stores at (frozen food stores, organics and open-air markets) $35 billion. France is a competitive retail market, considered to be the 2nd largest packaged food market in Europe, and the 5th largest in the world, according to Euromonitor. In 2020, retail sales in this sector have reached US$90.9 billion and according to Euromonitor, retail sales in the packaged food market should reach US$96.5 billion by the year 2025 (Food Export).

In many sectors, independent wholesale and retail outlets are disappearing rapidly and being replaced by retail distribution chains and networks. Small and medium-sized family-owned firms, are rapidly losing ground to hypermarkets. At the same time, direct marketing, Internet sales, and specialised chain stores have shown strong growth. "Drive systems" (quick pickup of products purchased online)  are being developed by all  retailers, as the internet sales shows fast growth.
Although the hard discount model had strong growth in the years 2011-2015, the French retail market moved on to a premium and best quality products from 2015-2016. This was illustrated by the ongoing cannibalisation of private labels by A-brands (Euromonitor).

The most dynamic retailers are undoubtedly the chains of organic shops and superstores, namely biocoop, Naturalia, La Vie Claire and Bio C'Bon, which profited from rising demand for organic products generally in France.
Merger and acquisition activity impacted the competitive landscape: in response to the ongoing price wars. The main trend of the sector has been towards joint purchasing agreements, mainly the creation of mega central purchasing blocs, specifically the alliances between Auchan France and Système U Centrale Nationale on the one hand and ITM Entreprises and Casino Guichard-Perrachon on the other. In 2018, Casino and ITM Entreprises terminated their purchase agreement and Casino merged part of its purchases with Auchan - Système U.

France's retail distribution network is diverse and sophisticated. Setting up of hypermarkets is regulated by the Royer Law of 1973 and the Raffarin Law of 1996. They aim to protect local shops, which are rapidly losing ground to hypermarkets. The Egalim Law of 2018 introduced a mechanism to give back more margin to the producers that has been extended in 2020.

Distribution market players

According to FCD, in 2019 the retail trade sector in France totalled approximately €200 billion sales revenue, 700,000 jobs, and more than 44,000 points of sales. In 2020, there were 2,257 hypermarkets, 5,716 supermarkets, 3,430 supermarkets with private label ranges of products and 7,140 convenience stores (LSA Focus). Drives represented 7.8% of retail food sales (USDA).
 
According to the Kantar WorldPanel, the market was divided as following as of Q1 2022: E.Leclerc (22.5% market share), Carrefour (20.2%), Groupement Les Mousquetaires (15.7%), Groupement U (11.3%), Auchan (9.4%), Casino (7.4%), Lidl (7.1%), Aldi (2.8%) and L.Delhaize (2.7%).

The trend is clearly oriented to smaller outlets, location in the city centre, shorter range of products and easy access. The bigger stores (hypermarkets and supermarkets) are mostly located in the suburbs and outside of the cities, offering larger ranges of products and lower prices.

Retail Sector Organisations

The Federation of Trade and Distribution Companies (FCD)
The Associated Trade Stores
The French Trade Council

Consumption Taxes

Nature of the Tax

Value-added Tax (VAT) (Taxe sur la Valeur Ajoutée or TVA)

Tax Rate

20%

Reduced Tax Rate

The reduced rate of 10% (art. 278 bis, 278 quater, 278 sexies A, 278 septies and art. 279 of the CGI) is applicable in particular to unprocessed agricultural products, firewood, housing improvement works which do not benefit from the 5.5% rate, certain accommodation and camping services, fairs and exhibitions, fairground games and rides, entrance fees to museums, zoos, monuments, passenger transport, processing of waste, restoration.
The reduced rate of 5.5% (art. 278-0 bis, 278-0 bis A, art. 278 sexies of the CGI) concerns most food products, feminine hygiene protection products, equipment and services for the disabled, books on any medium, gas and electricity subscriptions, supply of heat from renewable energies, supply of meals in school canteens, ticketing for live shows and cinemas, certain imports and deliveries of works of art, improvement works the energy quality of housing, social or emergency housing, home ownership.
The special rate of 2.1% (art. 281 quater et seq. of the CGI) is reserved for medicines reimbursable by social security, sales of live animals for slaughter and charcuterie to non-taxable persons, the television license fee, certain shows and press publications registered with the Joint Commission for Publications and Press Agencies.
The special rates applicable in Corsica are fixed in art. 297 of the CGI.
The special rates applicable to the overseas departments are fixed in art. 294 of the CGI.

Other Consumption Taxes

Excise duties are applied to alcohol and alcoholic drinks, processed tobacco and oil and gas products.
Companies that own, use, or lease vehicles for their business activity are subject to a tax on company vehicles (TVS).
In France, Extended Producer Responsibility (EPR) manifests through diverse eco-contributions across various product categories, such as electrical and electronic equipment, packaging, paper, textiles, furniture, tires, tobacco products, toys, mineral oils, and more.

Corporate Taxes

Company Tax

25% flat rate

Tax Rate For Foreign Companies

Generally, a resident company is a company that is incorporated under French commercial laws or that has a permanent establishment in the country. According to French jurisprudence, a company is deemed to have a permanent establishment if: the business activity is conducted through an establishment (branch, office, etc.); the company has a dependent agent in the country; or a complete commercial cycle is carried out in France.

Capital Gains Taxation

Capital gains are generally taxed as ordinary income under the standard CIT rate, regardless of asset ownership duration. However, a 10% reduced rate applies to gains from patents, patent-related processes, and software under restrictive conditions. Gains from shares in subsidiaries held for at least two years enjoy significant relief, with 88% of such gains excluded from CIT and the remaining 12% taxed at the standard rate. The French Administrative Supreme Court affirmed that the 12% taxable portion for foreign subsidiary share sales is real taxation eligible for tax credits under DTTs.
Long-term capital losses cannot offset future long-term capital gains. The long-term capital gain regime applies to shares benefiting from the parent-subsidiary regime if the seller holds at least 5% of voting rights and to shares in entities in NCSTs, provided the entity's activities are genuine and not profit-shifting.

Non-resident companies are generally not taxed in France on capital gains from French assets unless these are part of a PE, with exceptions for gains from French real estate or non-listed corporations, and gains from shares in a French company subject to CIT if the seller owned at least 25% of profit rights in the five years before the sale, unless otherwise stated by a DTT. Shares held for over two years may qualify for a special exemption, per ongoing court cases. For non-resident companies in an NCST, all gains from French assets face a 75% WHT, provided the entity’s activities are genuine and not aimed at profit-shifting.

Main Allowable Deductions and Tax Credits

Expenses are deductible for depreciation or amortisation, reserves, rents for premises and equipment, wages, interests and royalties, repairs and maintenance costs etc. Ceilings may apply to some expenses such as contributions to an employee's savings plan or write-offs of machinery and inventory. No specific rules govern the deduction of start-up expenses, except for qualified expenses incurred in establishing the company (known as 'frais d’établissement'), which can either be deducted immediately or depreciated over five years. Goodwill cannot be amortised.

Tax losses can offset the first EUR 1 million of taxable profits and 50% of any excess, provided the entity continues the same business activities. Losses can be carried back to the previous financial year up to EUR 1 million, with any surplus carried forward. The carryback election must be filed before the tax return deadline for the loss-making period. Tax losses in a French tax group, as well as pre-election losses of individual group members, follow the same rules and limits.

For R&D and software expenses, businesses can choose to immediately deduct R&D costs or amortize them over up to five years. Software acquisition costs can be written off on a straight-line basis over 12 months, while patent acquisition costs can be amortized over five years. An R&D credit is also available, at 30% of the R&D eligible expenses incurred during the year (up to EUR 100 million R&D expenses), and 5% on the part in excess of this amount.

For charitable donations made over a financial year ending on or after December 31, 2020, the tax reduction is 60% of the donation amount. If donations exceed EUR 2 million, the excess is eligible for a 40% reduction. The reduction is calculated based on the higher of EUR 20,000 or 0.5% of turnover. This reduction can be offset against the CIT liability for the year of the donation, with any excess applicable to the next five financial years.

Several taxes, including unrecoverable turnover taxes, registration duties, and the Territorial Economic Contribution, are deductible (corporate income tax is not).

The 2024 Finance Bill introduces a tax credit for green industries, covering 20% (or 25%-40% depending on the investment area) of eligible expenses, capped at EUR 150 million per company (or EUR 200 million to EUR 350 million for certain areas). Eligible expenses include investments in batteries, solar panels, wind turbines, and heat pumps. The credit applies to applications filed from September 27, 2023, and to accredited investments until December 31, 2025.

Effective January 1, 2019, the Competitiveness and Employment Tax Credit (CICE) was repealed and replaced by a permanent reduction in payroll charges that employers pay to fund the French social security system.

Other Corporate Taxes

Various local taxes are imposed by the government, like the Land tax or the Territorial Economic Contribution (CET), which comprises the Corporate Real Estate Contribution (CFE, based on the rental value of real estate) and the Contribution on Corporate Added Value (CVAE, based on turnover). The CVAE will be gradually reduced from 2024 to 2026 and will be abolished starting January 1, 2027.

Social security contributions payable by the employer vary depending on the size and type of business and the location, and in some cases can exceed 50% of gross pay (around 45% on average). The annual social security ceiling (PASS) is set at EUR 46,368 in 2024, and the monthly ceiling at EUR 3,864.
Companies that do not meet the 90% VAT liability threshold for their annual turnover are required to pay payroll tax (taxe sur les salaries) on the salaries paid in the subsequent calendar year. For companies falling below the 90% threshold, the payroll tax applies to the portion of their VAT recovery ratio that is not covered by their turnover. The standard payroll tax rate is 4.25%, but for gross individual wages exceeding specific thresholds, higher rates apply (8.5% for wages ranging from EUR 8,985 to EUR 17,936 and 13.6% for wages exceeding EUR 17,936).

The sale of real property is subject to a transfer tax up to a maximum rate of 5.8%. The sale of shares in an SARL or SNC incurs a transfer tax of 3% of the sales price, minus a deduction based on the number of units sold. For SA, SAS, or SCA shares, a flat rate of 0.1% applies, increasing to 5% for real estate companies. Transfer tax for the sale of French going concerns, customer lists, leasehold rights, or certain intellectual property rights used in France is 5%.

A financial transaction tax of 0.3% applies to transactions involving shares of publicly traded companies established in France whose capital exceeds EUR 1 billion.

A 3% digital services tax (DST) is levied on companies whose revenues derived from the provision of online placement of advertising, sale of collected user data and intermediation services exceeds EUR 750 million globally and EUR 25 million in France during the calendar year. For related companies, these thresholds are assessed at the group level.

Other taxes include: apprenticeship tax, company car tax, stamp duties, etc.

Other Domestic Resources

French Fiscal Administration web portal

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed

Tax Treaties of France

Withholding Taxes

Dividends paid by a French corporation to a non-resident shareholder are subject to a 25% withholding tax calculated on the gross dividends. Dividends paid by a French company to a European parent company are exempt from tax under the EU Directive on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States. Dividends paid to residents are generally exempt.

In general, interest payments are not subject to withholding tax.

Royalties paid to a non-resident company or individual are subject to the standard corporate income tax rate (25%). Royalties paid to a European company may be exempt from tax under the European common system of taxation applicable to cross-border interest and royalty payments. Royalties paid to residents are generally exempt.