A quick guide to common French accounting terms

If you currently run a company in France or even if you’re just setting one up, then chances are that you’ve faced some complicated French accounting terms that not even your translation app has been able to make sense of for you.

Some of the terms used in the French accounting system are a little confusing to say the least, which is why we’re going to go through them one-by-one, tell you the English translation, and explain what each term means in plain English (i.e. jargon-free).

What do these French accounting terms actually mean?

Bénéfices

The term Bénéfices means profits that you make on your business, after you pay all the costs but before taxes.

Your accountant may use the terms Bénéfices Agricoles (B.A.), Bénéfices Industriels et Commerciaux (B.I.C.), and Bénéfices Non Commerciaux (B.N.C.) to refer to profits that are made on agricultural, industrial and commercial, and non-commercial businesses respectively.

Contribution

This refers to business taxes paid by all industrial and commercial companies in France, which are used to finance the local government. It’s fairly complex, but to put it simply, these business taxes as a whole are known as Contribution Economique Territoriale (C.E.T.) or Territorial Economic Contribution.

There are two contributions that come under this umbrella:

  • Contribution Foncière des Entreprises (C.F.E.), which is based on the rental value of your business property

  • Contribution sur la Valeur Ajoutée des Entreprises (C.V.A.E.), which is based on the increase in value of that business property from the previous financial year

Depending on your business sector and location within France, your business may be temporarily or permanently excluded from these taxes.

There are two other taxes that you might hear of, which are the Contribution Sociale Généralisée (C.S.G.) and the Contribution au Remboursement de la Dette Sociale (C.R.D.S.), but these relate only to income made in France by French residents.

Impôt

This refers to tax that you will pay in France, including Impôt sur La Fortune Immobilière (I.F.I.), Impôt sur le revenue (I.R.), and Impôt surles societies (I.S.).

I.R. and I.S. refer to income tax and corporation tax respectively. I.F.I. refers to a new wealth tax that was introduced in January 2018 and is imposed on people with over €1,300,000 in real estate assets.

Régime

Régimes fiscaux refers to the two tax systems that govern individual businesses in France. There is the Régime micro, which is simpler and more suited to smaller businesses, and the Régime du reel, which is generally recommended for larger businesses.

If you’re unsure which system would be best for your business then French Business Advice, a company that specialises in helping people set up businesses in France, has put together a great primer to help you decide.

Other terms

Here we will quickly explain French accounting terms that require less of an explanation.

How can I simplify the accounting for my French business?

If you’re looking to streamline the accounting side of your French business, then one of the best things that you can do is to hire an English-speaking French accountant.

They know all the ins and outs of the French tax system, which is notoriously more complex than the English one, so they will be able to help you navigate it with ease. Often this will save you money as they can advise on how you can reduce the amount of tax you are liable for by using loopholes and exemptions.

Some can also regularly advise on all manner of financial matters from payroll to social security and even legal issues like registering a company.

By finding an English-speaking accountant in France, you’ll be able to take the pressure off and get back to what’s really important: running your business.

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