"CET" took over the previous business tax on January 1, 2010
Main features of the new law :
The scope of the CET ("Contribution Economique Territoriale") largely remains unchanged except for certain real estate assets within the scope of the new law that were previously excluded, for example properties held through a SCI, or wind turbines.
The CET has two components :
1. The CFE ("Cotisation Fonciere des Entreprises") is assessed on the rental value of properties (i.e., assets subject to property tax in France) owned or used two years prior to the current year. Other tangible assets not subject to property tax that were previously within the scope of the business tax are no longer taxed.
2. The CVAE ("Cotisation sur la Valeur Ajoutee des Entreprises") is determined by applying a rate to the value added amount made by the company in the current year.
The CVA tax rate is 1.5% for companies with revenues exceeding €50,000,000 and is progressive based on the level of revenues for the other companies from €500,000 revenues.
The CET (CFE+CVA) is capped at 3% of the added value. However, this limitation is offset against the CFE only. The CVA (1.5% of the added value) is not subject to such limitation.
This reform is expected to lead to a reduction in business tax for a majority of taxpayers. However, if the reform increases the business tax, transitional relief will be available upon request to the taxpayer until 2013. The amount of transitional relief provided will be determined through a calculation that is based on the difference between the total business tax as computed under the new law versus what the business tax would have been under the previous law. As a result, CET should not exceed business tax by more than 10% in 2010.
French Ministery of Foreign Affairs 
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