Doing Business in France - RSM International

4.3.2 Tax on undeveloped and developed property
The tax on undeveloped property (taxe foncière sur les propriétés non bâties) is due
from owners of undeveloped land. It is based on a “cadastral value” determined by
the land registry office multiplied by a coefficient that is determined yearly by the
local municipality. The tax is assessed on the net cadastral value, which is 80% of the
total cadastral value.
The tax on developed property (taxe foncière sur les propriétés bâties) is assessed in
a manner similar to the tax on undeveloped land, i.e. on the net cadastral value, which
for this purpose is one-half of the cadastral value stated in the local municipality’s
official records. This one-half base reduction is deemed to take into account the
expenses of depreciation, insurance, maintenance, etc.
4.4 Incentives and special deduction
4.4.1 Exemptions from corporate income tax
(i) Companies established in Urban Free Zones (UFZs)
Companies conducting business activity (with the exception of certain specific
activities) and created in a UFZ between January 1st, 2006 and December 31, 2014
may benefit from a corporate tax exemption during their first five years and from a
declining exemption during the following 3 years (9 years if there are fewer than 5
employees). The taxable profit eligible for the UFZ exemption is capped at €100K per
twelve-month period. The excess is subject to corporate income tax.
(ii) Companies established in Zones de Restructuration de la Défense (ZRD)
From January 1st, 2009, companies that set up a business activity (with the exception
of certain specific activities) in a ZRD, a zone previously used for national defense
activities, benefit from an exemption from corporate tax on their income deriving
from their activity realized in the ZRD. This exemption is equal to 100% over the
first 5 years, 2/3 during the 6th year, 1/3 during the 7th year. The ZRD income tax
exemption is capped according to the “de minimis” and “State aid” regulations.
(iii) Innovative start-up companies
From January 1st, 2004, small and midsize companies (fewer than 250 employees,
annual revenue < €50,000K or balance sheet totals < €43,000K) that are less than
8 years old and that have annual R&D expenses exceeding 15% of their overall taxdeductible
expenses may benefit from a three-year corporate tax exemption and
a 50% rebate for the following two years. The corporate income tax exemption is
capped according to the “de minimis” and “State aid” regulations.
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