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France's CFE (Cotisation Foncière des Entreprises) Demystified
Hey there! Let's dive into the world of CFE, a local tax all businesses in France (regardless of status, such as companies, freelancers, artisans, or traders) must pay annually. This tax is based on the rental value of any immovable property used for a professional activity, whether owned, rented, or held in usufruct.
So, what exactly is CFE?
CFE is a local tax applied to every business and self-employed individual in France with a non-salaried professional activity as of January 1st of the tax year. It's due on an annual basis with a set deadline determined by the tax administration.
The crux of CFE? Immovable property!
The CFE is based on the rental value of immovable property used for a company's professional activities. This value is determined by the tax authorities and urban planning department through the cadastral rental value.
Now, you might be asking, "Is CFE mandatory for everyone?"
Mandatory for all, but exceptions exist
CFE is mandatory for all businesses and self-employed individuals. However, there are exemptions. Newly created companies, or those depending on the nature of their activity, may be eligible for certain exemptions. Make sure to check the specific criteria for your situation, particularly for micro-entrepreneurs or companies in defense restructuring zones.
CFE: One part of a larger puzzle - CET
CFE is one component of the Territorial Economic Contribution (CET) in France. The CET consists of both the CFE and the Cotisation sur la Valeur Ajoutée des Entreprises (CVAE). Even if a company generates little or no turnover, it is subject to the CFE.
CVAE: Turnover-based tax
CVAE is calculated based on the added value produced by the company in the previous year. Companies must pay CVAE if their turnover exceeds a certain threshold. Added value is defined as the difference between turnover and direct charges related to the company's activity.
Differences between CFE tax and CVAE tax
The key difference lies in their tax bases:
- CFE is based on the rental value of immovable property.
- CVAE is based on the added value produced by the company.
The two taxes are due by businesses, but they are calculated separately and may be paid by the same business depending on its activities and revenues.
Funding local authorities
The primary purpose of CFE is to fund local authorities, particularly municipalities and intermunicipalities. It contributes to the funding of local public services like territorial development, infrastructure management, and other local authorities' current expenses.
A tax on business location
CFE serves as a tax on the occupation of professional premises, meaning it reflects the use the business makes of those spaces in its operations. By doing so, it helps local authorities better distribute the tax burden among businesses according to their geographical location, contributing to local development.
Payment dates and deadlines for CFE in 2025
Now that we've covered the basics, let's talk about the most pressing concern - when to pay the CFE. For a total payment of less than 3,000 euros, the entire amount is due by December 15 of each year. For amounts exceeding 3,000 euros, a first deposit of 50% is due between May 31 and June 15, with the balance due by December 15.
Check your notice for the exact amount and deadline applicable to your business. Happy paying! ;)
[1] Prisma Media Group, "Horodatage des délais de versement," [online], (accessed on May 11, 2023).[2] Service-public.fr, "interprofessionnel de l'économie pour les entreprises (IPE) - contributions et cotisations - cotisation foncière des entreprises (CFE)," [online], (accessed on May 11, 2023).
Financing a business in France involves both CFE and CVAE payments. CFE, a local tax, is mandatory for all businesses and self-employed individuals with a non-salaried professional activity based on the rental value of immovable property used for the business.
CFE, one component of the Territorial Economic Contribution (CET), is due annually, with larger payments split into two installments—50% in May-June and the remainder in December. On the other hand, CVAE is based on the added value produced by the company.
