How the CFE tax works for self-employed and home businesses in France

If you work from home as a non-salaried person in France and earn more than €5,000 a year, you either have to pay the Cotisation foncière des entreprises (CFE) tax, or do the paperwork to be exonerated.

The tax applies even if the space you use for work is limited to one desk in a bedroom.

It is a successor to the old taxe professionnelle and the money raised from it goes into the pot for regional, departmental and communal taxes.

Rates are applied on a scale based on sales or total revenue. Those earning between €5,001 and €10,000, on the lowest scale, have to pay between €243 and €579 a year, with the amount decided locally.

The highest rate is for people earning over €500,000 where the rate is between €243 and €7,533.

In most cases the tax is paid monthly via direct debit.

Entrepreneurs individuels, as well as people running businesses registered as SARL, SA, SAS or SCI for example, are equally affected by the tax.

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The tax is managed through the same impots.gouv.fr site as income taxes, but through a separate professional tax account, and very often from a different tax office.

Who is liable?

Rules for CFE liability are broad: 

– You have to carry out your work in France 

– The work has to be habitual, and not a one-off project 

– The work has to be professional, rather than on a not-for-profit basis or limited to managing your own wealth.

There are also many types of work which are exonerated, as long as a request is made.

Exonerations come in two ways; those related to the nature of the work, and those decided by local authorities, usually in a bid to attract new business to the area.

For those related to work, there are 29 jobs where people do not have to pay the tax, reflecting in part the strength of lobby groups in French society.

A full list is available at on the government's service public website here.

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Who does not have to pay the CFE?

The main exclusions are for farmers, fishermen, taxi drivers, artisans (as long as they belong to a co-operative) and co-operative workers.

Some teachers, translators, artists, photographers, media workers, caregivers, lawyers, professional sportspeople, people running a chambre d’hôtes, union organisers, and people running businesses à caractère social also do not have to pay if they satisfy certain conditions, usually relating to where they live.

If you live in a bassin urbain à dynamiser (BUD) or a zone de développement prioritaire (ZDP), you can also apply for exoneration.

Exoneration in these cases is permanent as long as the nature of the business does not change.

For exonerations decided locally, the it is likely  temporary and linked to one of the many “zones de” used to draw business to an area.

The main forms to fill in and send to the tax office for exoneration are number 1447 M-SD, or Cerfa number 14031*14. 

Tick the autre box when asked for the reason you are filling out the form.

You may also need to fill in form 1447 E.

In any case, it would be a good idea to make an appointment with the local tax officer specialising in this tax to go over the forms. The forms do not correspond exactly with the information on the site entreprendre.service-public.fr so there may need to be some negotiation.

Tax officers who help with personal tax declarations are seldom able to help with business tax matters.