CFE: Definition and Explanation
CFE (Cotisation Foncière des Entreprises) is a local tax that all businesses must pay on their business premises. With a 6-year limitation period (compared with the usual 3 years), you can challenge tax assessments and recover substantial amounts. A property income deficit can also help optimise property taxation.
4 essential facts about CFE
Local taxation
CFE is a local tax on business premises paid by all businesses.
6-year limitation period
6 years to challenge assessments and recover overpayments (twice the standard tax period).
Property income deficit
A mechanism that allows property expenses to be deducted from rental income.
Substantial recovery
Recoverable amounts range from several thousand to hundreds of thousands of euros over 6 years.
Frequently asked questions about CFE
1What are CFE and French property tax?
CFE (Cotisation Foncière des Entreprises) is a local tax that all businesses must pay on undeveloped land and built property (business premises) they own or use. French property tax (taxe foncière) applies to property owners. Both taxes can be optimised, and overpayments can be recovered in the event of calculation errors.
2How can CFE be optimised?
CFE optimisation involves: 1) Challenging tax bases if they are overvalued. 2) Deducting property income deficits from rental income. 3) Temporary exemptions for new buildings. 4) Reductions in certain areas (ZRR, ZFU). 5) Tax relief for businesses in difficulty. Our experts analyse your situation to identify all available optimisation opportunities.
3What is the limitation period for challenging CFE?
The limitation period is 6 years for CFE and French property tax, compared with 3 years for most other taxes. This means you can challenge assessments and recover overpayments for the previous 6 years. This longer period offers a substantial recovery opportunity for businesses that have never optimised their property taxation.
4What amounts can typically be recovered?
Amounts vary according to premises size and location: small commercial premises (€2,000–€5,000 per year), medium-sized premises (€5,000–€15,000 per year), and large industrial premises (€20,000–€100,000 per year). Over the 6-year limitation period, total recovery can reach several hundred thousand euros for large commercial or industrial properties.
5How does a property income deficit work?
A property income deficit allows property expenses (loan interest, works, co-ownership charges, property tax and CFE) to be deducted from rental income. If the deficit exceeds the income, the excess can be carried forward against rental income for the following 10 years or offset against overall taxable income within certain limits. This is a powerful tax optimisation mechanism for property investors and businesses that own property.
Optimise your property taxation
Recovery possible over 6 years for CFE and French property tax. Challenge tax assessments and make use of property income deficits.