Business Land Contribution (CFE) France 2026: Calculation, Exemptions & Payment

The CFE is recorded as a debit to account 63511 "Contribution économique territoriale", a subdivision of 6351, against a credit to 447. It is an operating expense, deductible from taxable profit. The 15 June instalment usually passes through 447, the 15 December balance clears it, and CFE due but not yet assessed at the closing date is accrued in 44812.

The Cotisation Fonciere des Entreprises (CFE) is one of the least well understood local business taxes by entrepreneurs. Yet every December, thousands of directors discover their CFE notice, sometimes with surprise, on their professional tax account at impots.gouv.fr.

Successor to the taxe professionnelle abolished in 2010, the CFE is owed by any natural or legal person habitually carrying out a non-salaried professional activity. It is calculated on the rental value of real estate used by the business, and its amount varies significantly depending on the municipality where the business is established.

This comprehensive guide explains how CFE works in 2026, how to calculate it, what exemptions exist, and how to optimize its payment.

Origin and Nature of the Tax#

The Cotisation Fonciere des Entreprises replaced the taxe professionnelle (TP) on 1 January 2010, as part of the reform of local taxation. Together with the Cotisation sur la Valeur Ajoutee des Entreprises (CVAE), it constitutes the Contribution Economique Territoriale (CET).

CFE is a local tax: rates are voted each year by municipalities and EPCIs (public bodies for inter-municipal cooperation). This is why CFE can vary considerably from one city to another for the same activity.

What is the CFE Used For?#

CFE revenues finance local authorities (municipalities, inter-municipal structures). The law caps the combined CFE and CVAE at 1.531% of value added produced by the business, an important fiscal shield for high-value-added companies.

The General Principle#

CFE is owed by any natural or legal person who habitually carries out a non-salaried professional activity in France, regardless of their legal status:

• Companies (SARL, SAS, SA, SASU, EURL...);
• Sole traders (EI, EIRL);
• Liberal professionals (doctors, lawyers, accountants...);
• Associations carrying out a profit-making activity;
• Micro-entrepreneurs (except exemption in the year of creation).

Permanently Exempt Activities#

Certain activities are permanently exempt from CFE:

• Farmers: farming businesses are exempt for their activities falling under agricultural profit (BA), CGI art. 1450;
• Fishermen: fishermen using one or two boats for their professional activity, whether or not they own them, together with artisanal fishing companies with at least one partner on board (CGI art. 1455);
• Craftsmen: workers making goods to order for private customers, or on their own account from materials they own, provided they use no help other than that of apprentices aged twenty or under at the start of the apprenticeship and holding a proper apprenticeship contract; they may in addition be helped by their spouse or civil partner and their children without losing the exemption (CGI art. 1452);
• Unfurnished residential lettings: they are not deemed to be carried out on a professional basis and are therefore outside the scope of the CFE, which is not the same as an exemption. Letting unfurnished premises for a use other than dwelling is deemed professional and does fall within the scope once gross receipts excluding VAT for the reference period reach 100,000 € (CGI art. 1447, I): a point worth checking for SCIs letting commercial premises.

The Cadastral Rental Value#

The CFE tax base is the cadastral rental value of real estate that the taxpayer used for their activity during the reference period, that is the year before last preceding the tax year, or the last twelve-month financial year closed during that same year where it does not match the calendar year (CGI art. 1467 A). For the CFE due for 2026, the assets used in 2024 are what count.

1 January does not set the base, it sets liability: the CFE is due for the whole year by whoever carries on the activity on 1 January (CGI art. 1478, I). Confusing these two dates is the most common mistake on this tax. The rental value itself is determined by the tax authorities.

Included in the tax base:

• Professional premises (offices, warehouses, shops, workshops);
• Land used for professional activity;
• Boats used at a fixed point and fitted out for dwelling, trade or industry, even where they are only held by moorings (CGI art. 1381, 3°).

Note: Equipment and movable assets are no longer taken into account since the abolition of the taxe professionnelle. Only real estate counts.

The Minimum Contribution#

An important feature of CFE: businesses whose tax base is very low (or zero, particularly home-based workers with no dedicated premises) must pay a minimum contribution, set by the municipality based on the business's turnover.

The national scale for the minimum contribution (CGI art. 1647 D) is as follows:

Each municipality sets its amount within this range. Amounts therefore vary considerably: a rural municipality may apply the legal floor of 250 €, while a major city such as Paris may reach the authorized maximums. Businesses whose revenue does not exceed 5,000 € are exempt from the minimum contribution altogether.

Calculation Formula#

CFE = Tax base × Municipal rate

If the tax base is lower than the minimum contribution, the minimum contribution applies.

Standard Schedule#

Mandatory Online Payment#

CFE payment is mandatorily dematerialised for every liable business, and there are only three ordinary channels: direct online payment from the professional account on impots.gouv.fr, monthly direct debit, and direct debit on the due date. The account to be debited must be held in France or within the SEPA area.

Neither cheques nor TIP payments are accepted, and bank transfer is open only to non-resident businesses of certain countries: attempting a transfer means paying late. Businesses that have opted for monthly direct debit pay no 15 June instalment.

One calendar point is routinely missed: the CFE notice is no longer sent by post. It is made available in dematerialised form in the professional account on impots.gouv.fr, and it is up to the business to go and read it. The absence of a paper notice is the leading cause of late payment.

The CFE is an operating expense, not a tax on profits: it is recorded in account 63511 "Contribution économique territoriale", a subdivision of 6351 "Direct taxes (excluding income taxes)", itself attached to 635 "Other taxes and similar payments". It is therefore deductible from taxable profit, unlike corporate income tax.

Entry on receipt of the assessment#

Entry on payment#

The direction of the entry is the first source of error: the CFE is an expense, so account 63511 is always debited. Account 447 acts as a holding account between receipt of the assessment and the cash outflow; where both fall within the same period and on the same date, the entry can be reduced to a debit of 63511 against a credit of 512.

The accounts to know for the CFE#

Two points deserve particular care. The first is the choice of expense account: posting the CFE to 63512 "Property taxes" is a frequent confusion, since property tax is owed by the owner of the building and the CFE by the operator, and both can coexist in the same file. The second is the accrual account: 4486 belongs to the former chart of accounts and was renumbered 44812 when the French general chart of accounts was modernised.

The three cases that raise questions#

• The 15 June instalment. It is not a separate expense. In practice it is posted as a debit of 447 "Other taxes and similar payments" against a credit of 512, with 447 temporarily in debit until the December settlement clears it. No text imposes this treatment: other firms use a dedicated prepayment account. The full expense for the period stays in 63511.
• CFE due but not yet received at the closing date. It attaches to the period in which it is due: an accrued expense is recognised by debiting 63511 against a credit of 44812 "Charges à payer", a subdivision of 4481 "État - Charges à payer", reversed at the opening of the following period. Beware of account 4486, still widely copied: it no longer exists in the chart of accounts in force, where it has been renumbered 44812.
• A relief obtained. Under the chart of accounts in force, it is no longer recorded as exceptional income: it is posted to account 7584 "Relief of taxes other than income taxes", a subdivision of 758 "Indemnities and other income". Account 7717, still quoted by many articles, has gone: class 77 is now limited to accounts 772 and 778.

Year of Creation Exemption#

Newly created businesses are not liable to CFE for the year of their creation, and the base for the first taxable year, that is the year after creation, is halved (CGI art. 1478, II).

One filing obligation goes with that first year and is often missed: the initial return no. 1447-C-SD must be filed before 31 December of the year of creation, including where the business is exempt for that first year.

For micro-entrepreneurs, this exemption applies for the calendar year of creation. Note: businesses whose revenue or receipts for the reference period do not exceed 5,000 € are exempt from the minimum contribution (CGI art. 1647 D), which in practice covers many low-activity micro-entrepreneurs.

Geographic Zone Exemptions#

Two widely quoted schemes are no longer open. Urban free zones (ZFU-TE) give a CFE exemption only for establishments created or extended between 1 January 2006 and 31 December 2014 (CGI art. 1466 A, I sexies): no later establishment can qualify. Rural revitalisation zones (ZRR) have been closed to new entrants since 1 July 2024 and have been replaced by the France Ruralités Revitalisation zoning.

Sectoral Exemptions#

• Innovative young companies (JEI): optional exemption, subject to a vote by the municipality or EPCI, for seven years, for companies existing on 1 January 2004 or created up to 31 December 2028, subject to de minimis Regulation (EU) 2023/2831 (CGI art. 1466 D);
• Craftsmen and fishermen: the exact conditions are set out in CGI articles 1452 and 1455, detailed above;
• Furnished lettings: the non-professional character of the activity gives no CFE exemption at all. CGI art. 1459 exempts only the occasional, non-recurring letting of part of the owner's personal dwelling, the furnished letting or subletting of rooms in the landlord's main residence where those rooms are the tenant's main residence and the price stays reasonable, and, unless the municipality votes otherwise, premises classified within the meaning of article L. 324-1 of the tourism code as well as other furnished lettings where those premises form part of the landlord's personal dwelling. Every one of these exemptions is tied to the landlord's own dwelling, never to LMNP status.

One of the most important mechanisms for high-value-added companies is the CFE rebate linked to the CET cap.

The CET (CFE + CVAE) cannot exceed 1.531% of value added produced by the business. If it does, the business can claim a CFE rebate. One limit should be known before quantifying the saving: the rebate cannot bring the territorial economic contribution below the amount resulting from article 1647 D of the CGI, that is below the minimum contribution.

The application is made on form no. 1327-CET-SD (businesses taxed on actual profits) or no. 1327-S-CET-SD (micro-enterprise or special declarative regimes). The time limit is the CFE claim period: no later than 31 December of the year following the year in which the tax was collected, that is following the tax roll or the notification of the collection notice (LPF art. R*196-2). The starting point is collection, not the tax year.

Note: contrary to a widespread belief, the CVAE has not been abolished. The 2025 Finance Act postponed its final abolition to 2030 and froze the maximum rate at 0.28% for 2026 and 2027 (CGI art. 1586 quater). In 2026 the CET therefore remains the sum of the CFE and the CVAE for businesses liable to it.

If you believe your CFE is overstated (rental value too high, underused premises, activity carried out from home without a dedicated office space...), you can:

1. File a claim with the Business Tax Office (SIE) on which you depend, no later than 31 December of the year following the year in which the tax was collected, that is following the tax roll or the notification of the collection notice (LPF art. R*196-2);
2. Attach supporting documents (lease, cadastral certificate, floor plan, evidence of home-based activity);
3. Request a reduction in rental value if premises are only partially used.

For remote workers and activities carried out exclusively at home (without a dedicated space separate from the dwelling), the assessment base is zero and only the minimum contribution applies.

• CFE is owed by any person carrying out a non-salaried professional activity in France;
• The base is the cadastral rental value of the professional premises used during the N-2 reference period (CGI art. 1467 A); 1 January sets liability, not the base;
• A minimum contribution applies based on turnover, even without premises (home-based workers);
• Businesses created in 2026 are fully exempt for the year of creation;
• A 50% instalment is due before 15 June where the prior year CFE reaches 3,000 €;
• CFE + CVAE are capped at 1.531% of value added produced.

(Sources: CGI art. 1381, 1447, 1450, 1452, 1455, 1459, 1465, 1466 A, 1466 D, 1466 G, 1467 A, 1478, 1586 quater, 1647 B sexies, 1647 D and 1679 quinquies; LPF art. R*196-2; chart of accounts of the Autorité des normes comptables, version at 1 January 2026; impots.gouv.fr, "Local taxes: CET (CFE and CVAE) and TF"; service-public.gouv.fr, fact sheet F23547)