Understanding the French Tax Landscape

Before diving into specific incentives, let's understand the baseline tax environment:

Corporate Income Tax (Impôt sur les Sociétés - IS)

- Standard rate: 25% (as of 2024) - Reduced rate: 15% on first €42,500 of profits for SMEs - Loss carry-forward: Unlimited time, but capped at €1M + 50% of profit exceeding €1M per year

Other Business Taxes

- Value Added Tax (VAT): Standard 20%, reduced rates for certain sectors - Contribution Économique Territoriale (CET): Local business tax, varies by location - Social charges on salaries: ~42-45% of gross salary (employer portion)

Against this backdrop, the tax incentives available can provide substantial relief, particularly for R&D-intensive startups.