Who is subject to corporation tax? Some Words for It

By Paul Petersen 4 years ago

Corporate income tax is compulsory for the following companies, professional unions for their activities relating to the study and defense of the rights and interests of their members. For the following companies, taxation of corporation tax is optional (but definitive):

  • The individual entrepreneur,
  • One-person limited liability company.
  • General partnerships.

The ventures

Civil companies having an industrial or commercial activity

Companies created in fact. It should be noted that for the years ended since December 31, 2020, EIRLs as well as partnerships and similar may waive this option until the 5th financial year following the one in respect of which it was exercised. The tax authorities must then be expressly alerted. You can visit www.taxfyle.com for the best deals now.

How to benefit from the corporate tax rate reduced to 15%?

The reduced rates concern SMEs including:

  • Turnover excluding tax (CAHT) is less than € 7.63 million
  • The capital has been fully repaid and is held at least 75% by natural persons (or by a company applying this criterion).

The 15% rate applies to the portion below 38,120 euros of profits for companies including:

  • The turnover is less than € 7.63 million.
  • The capital has been fully repaid and is held at least 75% by natural persons (or by a company applying this criterion).
  • Note that these conditions are cumulative. For the financial year starting from January 1, 2020, the rate of 28% applies beyond 38,120 euros in profits.

Increased CIT rate

Sometimes the corporation tax (IS) is increased:

A social contribution: 3.3% of the corporate tax due for companies with a turnover of at least 7.63 million euros and whose corporate tax exceeds 763,000 euros

  • An exceptional contribution of 15% for companies with a turnover of over 1 billion euros and an additional contribution of 15% for companies with a turnover of over 3 billion euros.

Corporate taxes: the case of micro-enterprises 

The micro-enterprise regime applies as long as the turnover cancels excluding tax does not exceed 170,000 euros for trade and housing supply activities and 70,000 euros for services and liberal professions relating to BNC or BIC. The micro-enterprise tax regime applies to the entrepreneur who is subject to income tax (in the category of micro-BIC or micro-BNC). The taxable profit is determined by the tax administration which applies a standard allowance based on the amount of declared turnover: 71% of turnover for trade or housing supply activities, 50% of turnover for other relevant activities. of BICs and 34% of turnover for BNCs.