Tax policy directorate – Bureau a

 
CHAPTER 4: 
LOCAL ECONOMIC CONTRIBUTION 
The local business tax was abolished on 1 January 2010 and was replaced by a local economic 
contribution (contribution économique territoriale, CET) comprised of a business premises contribution 
based on the rental value of property and a contribution on business value added calculated on the 
basis of the value added generated by a business.
I – BUSINESS PREMISES CONTRIBUTION 
Individuals or legal entities, unincorporated companies or trustees, in respect of their activity governed 
by a trust agreement, carrying on a regular non-salaried business activity in France are liable to the 
business premises contribution (cotisation foncière des entreprises, CFE) every year. 
All the local business tax exemptions were kept for the business premises contribution, except optional 
exemptions applying to infrastructure and movable property and those which have lapsed. Exemptions 
may be:
• 
Automatic and permanent (essentially cultural, educational, health-related, social, sports-
related or tourism activities carried on by the State, local authorities and public establishments, 
major seaports, low-rental housing organisations, agricultural activities and organisations, 
private schools, some craft or press activities, specialised press distributors, etc.) 
• 
Automatic and temporary (young lawyers) 
• 
Optional (as they are granted by local authority decision or in the absence of a decision to the 
contrary) and permanent (furnished accommodation landlords, Municipal Credit Banks, live 
performances, cinemas, independent bookshops with the LIR label, independent record shops, 
etc.) 
• 
Optional and temporary (exemptions in respect of spatial planning, urban policy or as incentives 
for new businesses, created to take over a failing industrial company, which are innovative or 
part of a cluster). Subject to certain conditions, an allowance is applied to the business 
premises contribution tax base for businesses based in overseas départements. 
The business premises contribution tax base is comprised of the rental value (less 30% for industrial 
plants) solely for property liable to property tax in France, excluding property exempt from property tax 
on developed land (machinery and other installations and equipment used to operate industrial plants 
and the fixed assets used for photovoltaic electricity generation), which the taxpayer used, for business 
purposes, during the reference period. This does not include assets destroyed or disposed of during the 
same period. The reference period is usually the penultimate calendar year prior to the taxation year or 
the last twelve-month financial year closed during said year when this financial year does not 
correspond to the calendar year. 
The business premises contribution is assessed in each commune where the taxpayer has premises or 
land. In principle, it is payable for the entire year by a taxpayer carrying on a taxable and non-exempt 
activity on 1 January on the basis of the tax components existing on the last day of the reference period, 
subject to a certain number of exceptions. For business creations, it is not owed for the first year and 
the tax bases are halved for the year after creation. 

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The business premises contribution is calculated by multiplying the tax base less reductions and 
allowances by the rates decided upon by the communes or their public establishments for 
intercommunal cooperation with powers of taxation
92
. 
The calculated amount may not be less that the minimum contribution determined from a base. The 
amount of this base is set by the municipal council or the public establishment for intercommunal 
cooperation, replacing the former. This base must respect the following scale: