Roche & Cie

Gradual decrease of corporation tax

The corporate tax rate will be gradually reduced from 33.33% to 28% for all companies by 2020.

This reduction should, according to the government, increase the attractiveness of the territory and encourage businesses to invest.

Decrease in the standard rate

The reduction will be in four stages.

  • First, for fiscal years beginning on or after January 1, 2017, only SMEs will benefit from the 28% rate and only up to € 75,000 of taxable profit.
    Precision: companies with fewer than 250 employees with a turnover of less than € 50 million or a balance sheet total not exceeding € 43 million, as well as those with a reduced rate of 15%, are targeted.
  • Then, for fiscal years beginning on or after January 1, 2018, the measure will be extended to all companies, up to a profit of € 500,000.
  • Then, for fiscal years beginning on or after 1 January 2019, all profits will be affected by companies with a turnover of less than or equal to € 1 billion. Others will continue to benefit only up to € 500,000 in profit.
  • Finally, corporate tax will be lowered for all companies, regardless of their turnover and profit amounts, for fiscal years beginning on or after 1 January 2020.

Extension of reduced rate

– Concurrently with the benefit of the reduced rate of 28% from 2017, SMEs will continue to benefit from the reduced rate of corporation tax of 15% to 38,120 € of profit.
This applies to companies whose turnover is less than € 7.63 million and whose capital, fully paid up, is continuously held by at least 75% by natural persons.

– For fiscal years beginning in 2019, the benefit of this 15% rate will be extended to companies whose turnover is less than € 50 million, still within the limit of € 38,120 of profit.

Art. 11, Law No. 2016-1917 of 29 December 2016, OJ of 30.

Source: Les Echos

Cabinet Roche & Cie. Expert Accountant Lyon.