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France Business Expenses Guide

deductible business expenses in France. The guide covers: the general principles (Article 39 of the CGI) — an expense is deductible from the corporate tax (IS) or the personal income tax (IR) if it meets three conditions: (a) the expense is necessary for the business (the "nécessité de la dépense" — the expense must be incurred to generate or maintain the company's income), (b) the expense is actually incurred (the "réalité de la dépense" — the expense must be supported by an invoice or a contract), (c) the expense is in the company's interest (the "intérêt social" — the expense must not be excessive or unrelated to the business); the deductible expenses — (a) salaries and social charges (the "frais de personnel" — the gross salary, the employer social charges, the employee benefits), (b) rent (the "loyers" for the business premises), (c) professional fees (the "honoraires" — the fees for lawyers, accountants, consultants, architects), (d) travel expenses (the "frais de déplacement" — the train tickets, the airline tickets, the hotel accommodation, the taxi/Uber costs), (e) meal expenses (the "frais de repas" — the cost of business meals with clients or colleagues: 100% deductible if the meal is directly related to the business and is not excessive; the meal expense for the entrepreneur's own lunch is not deductible — the "repas du dirigeant" is a personal expense), (f) vehicle expenses (the "frais de véhicule" — the fuel, the insurance, the maintenance, the depreciation of the company vehicle), (g) office supplies (the "fournitures de bureau" — paper, printer ink, stationery), (h) communication costs (the "frais de communication" — telephone, internet, mobile phone), (i) advertising and marketing (the "frais de publicité" — the website, the Google Ads, the brochures, the trade fairs), (j) insurance (the "primes d'assurance" for the business), (k) depreciation (the "amortissement" of the buildings, the machinery, the IT equipment, the vehicles); the non-deductible expenses (réintégration) — (a) fines and penalties (the "amendes et pénalités" — the traffic fines, the tax penalties, the criminal penalties), (b) personal expenses (the "dépenses personnelles" — the entrepreneur's personal living expenses, the clothing, the holidays), (c) the 5% non-deductible portion of the dividends received under the mère-fille regime (the "quote-part de frais et charges" of 5%), (d) the 12% non-deductible portion of the long-term capital gains on the sale of shares (the "quote-part des frais et charges sur les plus-values à long terme"), (e) the excessive remuneration (the "rémunération excessive du dirigeant" — if the salary of the manager is excessive compared to the market or the company's results, the DGFiP can disallow the deduction), (f) the entertainment expenses that are not documented (the "frais de réception" — the restaurant bills, the client gifts, the hospitality costs — must be fully documented); the limit on the deduction of company cars — the depreciation of a company car is deductible only up to €30,000 of the purchase price (the "plafond d'amortissement des véhicules de tourisme" — the excess depreciation is not deductible); the deduction of the fuel cost is fully deductible for diesel and petrol; the limit on the deduction of interest on loans from shareholders — the interest paid to shareholders on their loans to the company is deductible only up to 2% above the average bond rate (the "plafonnement des intérêts versés aux associés" under Article 39-1-3° of the CGI).

The deductibility of business expenses in France is strictly controlled by the DGFiP. All amounts in Euros (EUR). For related reading, see our Corporate Tax Guide → and Starting a Business Guide →.

Key Non-Deductible Items

• Company car depreciation cap: The depreciation of a passenger car (voiture de tourisme) is deductible only up to €30,000 of the purchase price. For electric vehicles, the cap is higher (€30,000 to €40,000 depending on the year). The cap applies to the purchase price (not the value of the car).

Documentation Requirements

• Invoice must be issued in French: All invoices for deductible expenses must be in French (the "obligation de facturation en français" — the invoice must be issued in the French language, even if the supplier is foreign; the taxpayer can translate the invoice if it is in a foreign language). The invoice must include: the supplier's name, the supplier's TVA number (if applicable), the date, the description of the goods or services, the amount, the TVA amount.

For the specific rules on vehicle expenses, see our Motor Vehicle Tax Guide →. For the interest deduction rules and the thin capitalisation, see our Corporate Tax Guide →.