Provisioning your taxes: securing cash for CIT, VAT and CFE

Quick answer. A company subject to corporate income tax must anticipate three flows: corporate income tax (instalments on 15 March, June, September and December, balance on 15 May), collected VAT that does not belong to it, and the CFE due on 15 December. The method: set aside each month a percentage of cash collected and forecast profit, in a dedicated account, aligned with those deadlines.

The scenario recurs in almost every young company file we handle: a profitable year, a current account that looks comfortable, then a tax deadline that turns a good year into a cash squeeze. The problem is not the amount of the tax. It is the absence of a provision. The money was spent, distributed or reinvested before the State claimed its share.

Provisioning your taxes is not saving money. It is acknowledging that part of the cash sitting in the account is already committed. This article is aimed at directors of companies subject to corporate income tax (SASU, SAS, SARL, EURL taxed at CIT). For a sole trader, whose logic rests on social contributions and personal income tax, we have covered the set-aside method for a sole trader in a separate guide.

A company subject to CIT bears three levies on different calendars. Lumping them into a single mental line is the most common mistake.

Corporate income tax hits the taxable profit of the financial year. VAT, on the other hand, is not a charge: it is money collected on behalf of the State. The CFE is a local tax based on premises, due regardless of profit. Three logics, three calendars, three provisions.

You will find a panorama of company taxes to place these three levies within a company's full set of tax obligations.

Our reading. VAT is the most dangerous item, because it never appears as a charge in the income statement. A director looking at gross margin sees a figure that includes, in the bank account, VAT that is not theirs. It is this gap between the accounting view and the bank view that creates nasty surprises.

Provisioning first requires estimating. The estimate need not be exact to the euro; it must be prudent and revisable.

Estimating CIT#

Corporate income tax is calculated on taxable profit. The reduced rate of 15 % applies up to 42,500 euros of profit, subject to conditions on turnover and capital ownership; above that, the standard rate is 25 %. Start from the forecast profit of the year, apply the relevant rate and reach an annual target.

A company generating 60,000 euros of taxable profit and meeting the reduced-rate conditions bears CIT of around 6,375 euros on the first band (42,500 x 15 %) plus 4,375 euros on the surplus (17,500 x 25 %), about 10,750 euros. That is the sum to have set aside by the time the balance falls due.

Estimating VAT#

Under the standard real regime, VAT is declared via the CA3, monthly, or quarterly if the annual VAT due is below 4,000 euros. The VAT provision is not a prudent estimate: it is a euro-for-euro calculation. All collected and not-yet-remitted VAT must remain available. The simplified VAT regime is abolished on 1 January 2027 by the 2025 Finance Act; companies still benefiting from it will move to more frequent returns, and therefore a more rhythmic tax cash flow.

Estimating CFE#

The year's CFE is most often close to the previous year's, barring a change of premises or situation. Last year's CFE notice is the best estimation base.

There is no universal percentage. Be wary of the "set aside 30 %" heard everywhere: that figure mixes situations that have nothing in common. The right rate depends on your margin, the applicable CIT rate and your VAT position.

Trade-off. Two approaches coexist. The first sets aside a fixed percentage of each receipt, easy to automate but imprecise if the margin varies. The second provisions VAT separately (euro for euro, from invoicing) and CIT (on estimated monthly profit), more exact but more demanding to track. For a company with steady activity, the fixed percentage suffices; for seasonal activity or volatile margins, the separate provision avoids jolts.

The reliable forecast we build with our clients serves precisely to set this rate from figures specific to the company, rather than a general rule.

A provision left in the operating account is not a provision: it is an intention. As long as the sum is mixed with everyday cash, it is spendable, and it ends up being spent.

We recommend isolating tax cash in a separate account. A sub-account or a dedicated reserve account is enough. The aim is psychological as much as accounting: what is separated is no longer seen as available. Banking tools such as isolating tax cash with Qonto let you create these sub-accounts in minutes, and accounting tools such as tracking VAT in Pennylane give the VAT position to provision in real time.

The underestimated risk. The risk is not only running short of cash on the deadline. It is having distributed dividends or raised the director's pay while looking at an account that held un-provisioned VAT and CIT. The sum goes out, the tax remains due, and the catch-up then falls on operating cash, at the worst time.

Provisioning without a calendar means piling up cash without knowing when it will go out. Steering consists of making the provision available on the exact date of the deadline.

The CIT calendar#

CIT is paid in quarterly instalments on 15 March, 15 June, 15 September and 15 December, then a balance. A company is exempt from instalments if the previous year's CIT is below 3,000 euros: this is often the case in the first year. The balance is due on the 15th of the fourth month after year-end, that is 15 May for a 31 December close.

The VAT and CFE calendar#

VAT under the standard real regime follows the monthly or quarterly CA3. The CFE is due on 15 December; a 50 % instalment is payable on 15 June if the previous year's CFE reaches or exceeds 3,000 euros. The 15 December date thus concentrates both a CIT instalment and the CFE balance: a date to watch closely. The 2026 filing deadlines complete this calendar for the other obligations.

A provision is only correct at the moment it is set. Profit changes, margin shifts, VAT follows activity. Each instalment is a checkpoint.

In practice. At each deadline paid, compare what you had provisioned with what was actually due. If you over-provisioned, the rate can be lowered for the rest of the year. If you under-provisioned, it is better to notice it in March than to discover it in May. This quarterly review is what distinguishes a steered provision from a blind kitty.

A common case seen at the firm#

A services SASU, profitable in its first year, had provisioned no CIT because it thought it was exempt from instalments. It was indeed exempt, for the instalments. But the balance remained due on 15 May, and the account had been emptied by a year-end pay-out. The director had to forgo part of their remuneration temporarily to absorb the balance. The instalment exemption is not a tax exemption: it simply shifts the charge onto the balance.

2026 watch points. Two points deserve attention. First, the abolition of the simplified VAT regime on 1 January 2027 will require the companies concerned to file more frequently from the following year: VAT cash will have to be tracked monthly rather than overall. Second, the build-up of several deadlines on 15 December (a CIT instalment and the CFE balance) creates an outflow peak to anticipate from the autumn.

To frame these provisions against your real situation, our corporate tax support starts from your figures and your own calendar, rather than a general rule.