Corporate income tax (CIT) is levied on a company's net profit — not its revenue. A thriving business that ends the year with a nil result owes, in principle, no CIT at all. It is this taxable profit — derived from the accounts and adjusted in accordance with tax rules — that forms the basis of assessment.
In 2026, the framework has settled around two main rates — 25% and 15% — with an additional exceptional surcharge for very large groups that can push the effective rate considerably higher.
The Standard Rate: 25%, Unchanged Since 2022
The standard CIT rate is set at 25% for all financial years beginning on or after 1 January 2022. No change is planned for 2026: the gradual reduction that began in 2017 — bringing the rate down from 33.33% to 25% over five years — is complete, and the legislature has not announced any further movement.
This rate applies to the entirety of taxable profit for companies that do not qualify for the reduced rate, and to the portion exceeding €42,500 for eligible SMEs.
Companies subject to CIT include:
- Capital companies (SA, SAS, SARL, SCA, etc.) on a mandatory basis.
- Certain civil law companies (sociétés civiles) carrying on a commercial activity.
- Partnerships (sociétés de personnes) that have elected to be taxed as corporations.
The 15% Reduced Rate: A Benefit Reserved for SMEs, Subject to Strict Conditions
Small and medium-sized enterprises may benefit from a reduced rate of 15% on their first €42,500 of taxable profit per twelve-month financial year. Beyond that threshold, the standard rate of 25% applies.
This ceiling was raised from €38,120 to €42,500 for financial years ending on or after 31 December 2022 — it remains unchanged in 2026.
The Three Cumulative Conditions
To qualify for the reduced rate, a company must simultaneously:
- Generate turnover (excluding VAT) of no more than €10 million.
- Have fully paid-up share capital at the close of the financial year.
- Be at least 75% owned by individuals (or by a company that itself meets these conditions).
That last condition is technically demanding: the Conseil d'État issued two rulings in 2024 and 2025 clarifying how this ownership criterion should be read, particularly for companies that are members of a group or that hold treasury shares. In April 2026, the DGFiP (French tax authority) even published guidance aimed at companies that had incorrectly applied the reduced rate, opening a window for voluntary regularisation.
In practice, eligibility for the reduced rate can be lost following a fundraising round (when an investment fund acquires a stake) or when turnover crosses the €10 million threshold. This is a point that should be reviewed at every year-end close.
What This Looks Like in Practice
For an SME reporting €80,000 of taxable profit and qualifying for the reduced rate:
- On the first €42,500: €42,500 × 15% = €6,375
- On the remainder (€37,500): €37,500 × 25% = €9,375
- Total CIT: €15,750
Without the reduced rate, the same SME would have paid €80,000 × 25% = €20,000.
The maximum saving generated by the reduced rate is €4,250 per financial year (a 10-percentage-point difference applied to €42,500). Modest in absolute terms, but far from negligible for a small business.
The 3.3% Social Surcharge: Often Overlooked
A social surcharge on CIT (contribution sociale sur les bénéfices, or CSB) is levied on top of the base tax. It is set at 3.3%, calculated on the portion of CIT exceeding €763,000.
SMEs with turnover below €7.63 million are exempt from this surcharge, provided they meet the share capital conditions for the reduced rate.
For a large company subject to the standard rate, this surcharge brings the effective rate to 25.825% (25% + 3.3% × 25%).
The Exceptional Surcharge for Large Groups: An Effective Rate That Can Exceed 36%
Introduced by the Finance Act for 2025 and extended by the Finance Act for 2026, the exceptional surcharge on the profits of large companies (CEBGE) applies to companies whose turnover reaches certain thresholds.
For 2026, the entry threshold has been raised from €1 billion to €1.5 billion, with the explicit aim of excluding mid-sized companies (ETIs) from the scope of the measure. Approximately 300 large groups remain in scope.
The Rate Structure
- Turnover between €1.5 billion and €3 billion: surcharge of 20.6% of the average CIT due over the two most recent financial years.
- Turnover above €3 billion: surcharge of 41.2% of the average CIT due.
The surcharge is calculated on the average of the CIT due for the current financial year and the preceding year, before the application of tax credits. It is not deductible for the purpose of computing taxable profit.
Combined Effective Rates
Adding together the standard CIT, the social surcharge (CSB) and the CEBGE:
- Groups with turnover between €1.5 billion and €3 billion: effective rate of approximately 31%.
- Groups with turnover above €3 billion: effective rate of approximately 36%.
For the finance teams of these organisations, the CEBGE represents a significant cash flow burden: an instalment of 98% of the estimated amount is due on 15 December of the financial year.
The 2026 CIT Instalment Schedule
CIT is not paid in a single lump sum. It is settled through four quarterly instalments, calculated on the basis of the prior year's CIT liability (or the current year's, if that produces a lower figure):
- 1st instalment: 15 March 2026
- 2nd instalment: 15 June 2026
- 3rd instalment: 15 September 2026
- 4th instalment: 15 December 2026
The balance is paid within four months of the financial year-end, upon filing the annual return no. 2065 together with the full tax pack (liasse fiscale).
Companies whose prior-year CIT liability was less than €3,000 are exempt from paying instalments.
Key Takeaways
- Standard rate: 25% — applies to all CIT-liable companies, with no turnover condition.
- Reduced rate: 15% on the first €42,500 of profit, subject to three cumulative conditions (turnover ≤ €10m, fully paid-up capital, at least 75% held by individuals).
- Social surcharge (CSB): 3.3% on the portion of CIT exceeding €763,000, with an SME exemption.
- Exceptional surcharge (CEBGE): applies to groups with turnover above €1.5 billion, with a combined effective rate that can reach 36%.
- No changes to the base rates are planned: the 2026 CIT framework offers stable, predictable conditions for tax planning by SMEs and mid-sized groups alike.
Would you like to confirm your eligibility for the reduced rate, make sure your CIT calculation is on solid ground, or assess the tax impact of an upcoming transaction? The Trevys team is here to help — book an appointment.