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France Permanent Establishment Guide

the French permanent establishment (établissement stable) rules. The guide covers: the definition of a PE in French domestic law (Article 209 I of the CGI) — a foreign company is subject to French corporate tax on the profits attributable to its French establishment (the "établissement stable"); the domestic law definition of a PE includes: (a) a fixed place of business in France (the "installation fixe d'affaires" — an office, a factory, a workshop, a construction site, a mine or an oil well), (b) a dependent agent (the "agent dépendant" — a person who has the authority to conclude contracts in France on behalf of the foreign company, habitually exercises this authority, and is not an independent agent), (c) a service PE (the "prestation de services" — a foreign company that provides services in France through its employees for more than 183 days in a 12-month period); the treaty-based PE definition — most of France's 120+ tax treaties follow the OECD Model Convention (Article 5): the PE is defined as a fixed place of business through which the business of the enterprise is wholly or partly carried on; the exceptions (the "exceptions à la règle du PE") are: the use of facilities solely for storage, display, or delivery; the maintenance of a stock of goods for processing by another enterprise; the maintenance of a fixed place of business solely for purchasing goods or for collecting information; the maintenance of a fixed place of business solely for auxiliary or preparatory activities; the agency PE (the "agent dépendant") — if a person (a) habitually concludes contracts in France on behalf of a foreign company, or (b) habitually plays the principal role in the conclusion of contracts without material modification by the foreign company, the foreign company is deemed to have a PE in France; the independent agent (the "agent indépendant" — a broker, a commission agent, or a person acting in the ordinary course of their business) does NOT create a PE; the construction PE — a building site, a construction or installation project constitutes a PE only if it lasts for more than 12 months (the "chantier de construction" — the 12-month threshold applies under most French tax treaties); the tax consequences of a PE — if a foreign company is deemed to have a PE in France: (a) the company must register with the French tax authorities (the "immatriculation au RCS" and the "obtention d'un numéro SIRET"), (b) the company must file a corporate tax return in France (the "liasse fiscale 2065") and pay the IS on the profits attributable to the PE, (c) the company must file a TVA return (the "CA3") for the French operations, (d) the profits attributable to the PE are calculated using the "arm's length principle" (the "principe de pleine concurrence" — the PE's profits must reflect the profits that the PE would have earned if it were a separate and independent entity), (e) the PE is subject to the standard corporate tax rate (25% or 15% for the first €42,500 of profit) and the social solidarity contribution (C3S) if the turnover exceeds €19 million; the registration obligations — a foreign company with a PE in France must: (a) register with the Greffe du Tribunal de Commerce (the commercial court registry) within 15 days of the start of the activity, (b) appoint a "représentant fiscal" (a tax representative) who is jointly liable for the tax payments, (c) file the annual accounts (the "comptes annuels") with the Greffe.

France strictly applies the PE rules and can impose significant penalties for non-compliance. All amounts in Euros (EUR). For related reading, see our Corporate Tax Guide → and Cross-Border Tax Guide →.

PE Thresholds

• Fixed place — 12 months: A fixed place of business in France (office, factory, workshop) creates a PE from day one. A construction site creates a PE only if it lasts more than 12 months. A service PE is created if services are provided in France through employees for more than 183 days in a 12-month period.

Compliance Obligations

• Registration: A foreign company with a PE must register with the French authorities within 15 days of the start of the activity. The registration includes: (a) the "déclaration de début d'activité" at the guichet unique, (b) the "immatriculation au RCS" (the registration with the commercial court registry), (c) the "création du numéro SIRET" (the company's identification number), (d) the "déclaration de TVA" (the VAT registration).

For the corporate tax filing requirements for a PE, see our Corporate Tax Guide →. For the TVA registration and the reverse charge rules, see our VAT Guide →.