CFE is payable by any individual or legal entity carrying out a non-salaried professional activity on a regular basis as of 1 January of the tax year: companies, sole traders, freelancers and micro-entrepreneurs (above a very low turnover threshold).
Its calculation basis is the rental value of taxable immovable property that the business used for its activity during the reference period (usually the year before last, N-2). In practice: premises, offices, workshops, warehouses.
The amount is calculated as follows:
CFE = rental value of property × rate set by the municipality (or EPCI)
The rate varies significantly from one municipality to another, as it is set locally. The same activity may therefore be subject to very different CFE amounts depending on its location. A business without premises (or with very low-value premises, such as a consultant’s home) falls under the minimum contribution.
Two mechanisms structure the CFE for small businesses.
1. Minimum contribution. When the rental value of the property is low or zero (home-based business, service provider without dedicated premises), the CFE would be almost nothing. The law then imposes a flat-rate minimum base, set by the municipality within a scale based on turnover brackets. The higher the turnover, the higher the minimum base can be. This explains why a consultant working from home still pays CFE.
2. First-year exemption. A newly created business is not liable for CFE in its year of creation. In the following year (first full year of taxation), the base is reduced by half. An initial declaration (form 1447-C) must be filed by the end of the year of creation to ensure correct taxation thereafter.
Other exemptions exist (certain regional development zones, certain activities), but these two rules apply to almost all SMEs.
CFE does not require an annual amount declaration: the tax authority calculates the contribution and makes the notice available in the online professional area (it is no longer sent by post). You must therefore check it there.
Typical timeline:
Payment must be made electronically (direct debit or online payment). Failure to pay on time incurs a penalty.
From an accounting perspective, CFE is an operating expense recorded in account 63511 "Contribution économique territoriale". Since it is known in advance and recurring, it is prudent to provision for it monthly to avoid the cash flow gap in December. [Orizen accounting software](/wedges/logiciel-comptabilite) helps isolate and track these recurring tax charges in the income statement, so you can anticipate them rather than face them at the end of the financial year.
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Essai gratuit 14 jours What the Orizen accounting software module costsYes. Even without dedicated premises—for example, a consultant working from home—the business remains liable for CFE. As the notional rental value used is low or zero, the flat-rate minimum contribution applies. Its amount depends on a scale set by the municipality based on the company’s turnover bracket. Only the year of creation is fully exempt.
No. Any newly created business is exempt from CFE for its year of creation. The following year, which is the first full year of taxation, the calculation base is reduced by half. However, the initial declaration (form 1447-C) must be filed by 31 December of the creation year so the tax authority can correctly assess the contributions for subsequent years.
The CFE balance must be paid by 15 December at the latest, electronically (online payment or direct debit). A 50% deposit is due by 15 June if the previous year’s contribution exceeded a certain amount. The tax notice is not sent by post: it must be viewed in the online professional area. Late payment incurs a 5% surcharge.