A french succursale (branch) of UK company will pay tax to France or is it all going through the main office?

Question

A french succursale (branch) of UK company will pay tax to France or is it all going through the main office?

Answer 1

If the UK company has a taxable presence in France, then it will have to pay French tax on any profits it makes through its taxable French activities.

The UK company has to pay UK tax on all of its profits, including the profits made in France. The French tax paid is allowed as a deduction against the UK tax due, up to a maximum of the UK tax due.

The net effect of all this is that the French profits will be taxed at a rate which is the higher of the UK and French tax rates on that type of profit.

The first thing you need to find out is whether the branch has a taxable presence in France under French tax law. If you have an office out there through which the company carries on part of its business, or if you have staff or agents over there who are contracting on behalf of the company, the answer is probably "yes". This means you will need to file a French tax return for the branch.

The company may also be liable for French payroll and other taxes.