FREQUENTLY ASKED QUESTIONS/Which tax regime is best adapted for my company?/

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Which tax regime is the most appropriate for my company?

With Alf, we suggest that you opt for the equivalent of the Corporate Tax regime (Impôts sur les sociétés, IS). This is the default regime for SAS and SARL companies. SCIs are subject to free to choose this regime should they so wish.

Under the IS regime, tax is calculated on the profits made. The regular imposition rate is 33.33% but it is also possible to benefit from a reduced rate of 15% or 28%, according to the thresholds.

To benefit from reduced rates, the following three (3) conditions must be satisfied:

  • The annual turnover before tax must be less than 7.63 million euros;
  • The capital must be entirely paid-up;
  • at least 75% of the  share capital should be held individual, and not other companies.

The 15% rate will apply to the first 38 120€ of the profits, whilst the 28% rate will apply to current accounting period (1 January-31 December 2019) on all profits between 38 120€ and 500 000€.

There are two (2) corporation tax regimes, which have an impact on the VAT payable and when making your tax declaration:

  • The “régime réel normal d’imposition” (RN):  under this regime, a complete balance sheet prepared by an accountant must be filed with the relevant authority and an electronic declaration made. With regard to VAT, the company must send monthly electronic declarations. 
  • The “régime simplifié d’imposition” (RSI): under this regime, the company must file a simplified balance sheet and the VAT declaration is to be made annually. Our intelligent questionnaire proposes the most appropriate regime according to your situation according to the following criteria: to best protect your finances and to reduce your administrative tasks.

The regime you choose will apply from the date of incorporation and can be changed later on according to your preferences or due to a change in your situation.

To know more on the creation of your company and the management of your VAT paperwork, please visit our website!

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