The French Finance Act For 2018

The Finance Act for 2018 and the two amended Finance Acts for 2017 provided for new provisions of interest to companies.


The Finance Act for 2018 and the two amended Finance Acts for 2017 provided for new provisions of interest to companies. Certain provisions are applicable as of January 1st, 2018, others as of December 31st, 2017. We will indicate the date of entry into force of each measure.



  • Rural revitalization zones: Exemptions will continue to apply after a first transfer of the business to a family member. But they will stop at the second transfer.
  • Employment Zone to reinvigorate: The exemption scheme for new businesses is extended until December 31st 2020.



  • The additional amortization of 40% is extended until December 31st 2019 for vehicles with a gross vehicle weight exceeding 3.5 tons and using environmentally friendly fuels. This tax benefit also works when the company takes a new rental vehicle.
  • Withholding tax paid abroad: In order to avoid double taxation, source deductions paid abroad are worth a tax credit in France. For the years ended December 31st 2017, these withholding taxes are not deductible when the corporation cannot charge them against its tax.
  • Gradual reduction of the corporate income tax rate, the expected rates are as follows:
    • 2018 year: 28% up to € 500,000 profit, 33 1/3% beyond,
    • 2019 year: 28% up to € 500,000 profit, 31% beyond,
    • 2020 year: 28% of the total profit,
    • 2021 year: 26.5% of the total profit,
    • 2022 year: 25% of the total profit,

The 15% rate Up to € 38,120 in profit remains of course applicable to small companies.

  • Decrease in C.I.C.E: It goes down to 6% on the remuneration paid as from January 1st 2018. In return, starting in 2019, employers' social contributions will be reduced by 6% for wages not exceeding 2.5 times the minimum wage.
  • The tax rate on long-term capital gains for companies subject to income tax is reduced from 16 to 12.8% from the years ended December 31st 2017.



  • Share allocation representing a partial transfer of assets:

Approval does not have to be asked when the contribution consists of a complete branch of activity. The allocation of securities to the members of the transferring company is not considered as distributed income.

Accreditation must always be requested when the partial asset transfer is not made by a complete branch of activity.

  • Contributions to a foreign legal entity:

The transferring company must subscribe a declaration electronically which aims to inform the administration of the reasons and consequences of the operation.

  • Reform of the system of partial contributions of assets:

The special merger regime provided for in article 210A of the CGI is now applicable to:

- Partial contributions of assets,

- Splits of companies with at least two branches of activity.

These three new provisions apply to restructurings carried out from January 1st 2018.



  • All practitioners entitled to use the title of psychologist or psychotherapist are exempt from VAT from January 1st 2018.
  • From 2018, the tax is levied at 10% on new homes and housing resulting from the conversion of offices into housing under certain conditions:
    • Be established in a geographical area defined by law,
    • Be integrated into a real estate complex comprising 25% of surface area in social housing,
    • Be rented to people whose income is below a ceiling set by decree.


Other measures also concern VAT on online press services, rental of appliances for the disabled, and social housing construction operations. We are at your disposal to provide you with details if you wish.



  • Increase in turnover caps for the application of the MICRO scheme:

As of 2017 the annual ceilings are as follows:

- € 170,000 for the sale of goods, sales to be consumed on the spot, provision of housing (with the exception of renting furnished apartments other than furnished apartments for tourism),

- € 70 000 for other activities.

  • The VAT exemption thresholds are not modified. Thus, a taxpayer benefiting from the micro-scheme may be subject to VAT if he does not benefit from the franchise.



  • Salary Tax: Removal of the top rate (which was 20%) as of January 1st 2018.
  • Adjustment of CVAE calculation in groups of companies.
  • Exemption of “Cotisation Foncière des Entreprises” (CFE) for companies with an annual turnover less than or equal to € 5000.
  • Certification of cash software: This obligation is limited to cash register software only and will not concern accounting software. In addition, taxpayers not subject to VAT are not affected by this measure.
  • Elimination of the 3% tax on distributed incomes.
  • Modification of the rate of the companies cars tax. New tariff penalizes the most polluting passenger cars.


It should be noted that the provisions concerning particular sectors of activity, very large companies and control by the tax administration procedures have not been dealt with in this article.

You can discover the changes for individuals in our article

We are committed to providing you with information on any of these topics to anyone who requests it.