France has outlined tax incentives covering corporate income tax, local taxation, research and development, green industry investment, innovative companies and businesses established in designated areas, with measures including the 25% corporate income tax rate and the phased abolition of the CVAE by 2030.
France’s tax system provides a broad range of incentives aimed at supporting investment, innovation, business development and the environmental transition. The framework includes reductions in corporate income tax and local taxation, alongside targeted incentives for research and development, green investment, innovative companies and businesses established in designated areas.
The French tax administration’s guidance on tax incentives, originally published on 23 September 2016, was modified recently on 6 August 2026.
Corporate Income tax and local taxation
France has progressively reduced business taxation, including corporate income tax and local production taxes. The corporate income tax (IS) rate has been 25% for all companies since 1 January 2022, down from 33.3% in 2016.
The reduced 15% corporate income tax rate on profits up to EUR 42,500 applies to companies with turnover of EUR 10 million or less. The corporate income tax framework also provides for broad deductibility of provisions and depreciation allowances, unlimited carry-forward of losses, exemptions for certain dividends and capital gains on equity investments, and a group tax regime.
The final abolition of the business value added contribution (CVAE) is scheduled for 2030. For companies with turnover exceeding EUR 50 million, the maximum CVAE rate is 0.28% in 2026 and 2027, falling to 0.19% in 2028 and 0.09% in 2029.
A 50% reduction in property taxes for industrial establishments applies to property tax on built-up properties (TFPB) and business property tax (CFE), benefiting around 32,000 businesses operating more than 86,000 establishments.
Research Tax Credit
The Research Tax Credit (CIR) supports companies undertaking fundamental research, applied research and experimental development. Eligible expenditure includes depreciation of research assets, research personnel costs, certain employee remuneration, operating expenses, standardisation expenditure and qualifying outsourced research.
For its research and development component, the CIR is generally equal to 30% of eligible research expenditure up to EUR 100 million, falling to 5% above that threshold. The rate can reach 50% for companies located in overseas departments.
Since 2013, SMEs have also been able to benefit from the Innovation Tax Credit (CII), covering eligible expenditure on prototypes and pilot installations for new products. The CII has been extended until 31 December 2027 and generally provides a 20% tax credit on eligible expenses, subject to an annual EUR 400,000 limit.
Unused CIR can generally be carried forward for three years, with the remaining amount refunded thereafter. Immediate refunds are available for certain SMEs, innovative start-ups (JEIs) and companies subject to specified insolvency or restructuring procedures.
Green industry investment tax credit
Introduced in 2024, the Green Industry Investment tax credit (C3IV) supports industrial investment contributing to carbon neutrality. The scheme has been extended until 2028 under the European State aid framework (CISAF).
The C3IV applies to investments in four strategic sectors: batteries, solar panels, wind turbines and heat pumps. Eligible investments include equipment, buildings, machinery, patents, licences, know-how and other intellectual property necessary for production.
The base rate is 15%, increasing to 25% for medium-sized enterprises and 35% for small enterprises outside Regional Aid Zones (ZAFR). Higher rates apply in ZAFR 1 and ZAFR 2. The standard ceiling is EUR 150 million per project, increasing to EUR 200 million in ZAFR 1 and EUR 350 million in ZAFR 2.
C3IV applications require prior approval by the DGFIP, following an opinion from the French environment and energy management agency (ADEME).
Incentives for innovative companies
France provides tax and social contribution incentives for Young Innovative Companies (JEI), Young Growth Companies (JEC) and Young University Companies (JEU). The Budget Act for 2026 also introduced the JEI with impact (JEII) status.
A JEI generally must devote at least 20% of its costs to R&D expenditure, while a JEC must allocate between 5% and 20% and demonstrate strong growth potential. JEU status is linked to research activities developed through higher education institutions, while JEII companies must satisfy specified capital ownership and social and solidarity economy requirements.
Companies established by 31 December 2023 could receive a 100% corporate income tax exemption during their first profit-making tax year and a 50% exemption during the following year. JEIs, JECs and JEUs established from 1 January 2024 no longer qualify for this corporate income tax exemption.
Tax incentives for new businesses
New businesses in designated areas may receive corporate income tax, CFE and TFPB relief. Relevant schemes cover ZAFR, ZRR, BUD, ZRCV, ZDP and France ruralités revitalisation (FRR) zones.
Under the ZAFR, BUD and ZDP regimes, qualifying businesses can generally receive a 100% corporate income tax exemption for their first two years, followed by exemptions of 75%, 50% and 25% in the third, fourth and fifth years.
For ZRR and FRR businesses meeting the applicable conditions, a 100% exemption can apply for five years, followed by 75%, 50% and 25% exemptions over the next three years.
These incentives are subject to eligibility requirements and European State aid limits, including the “de minimis” regulation and the General Block Exemption Regulation (GBER). Local authorities may also grant corresponding CFE and TFPB exemptions.
