What is French corporate income tax (IS)?

In practice, in France

Capital companies — SAS, SARL, SA — are subject to corporate income tax by default. It is the standard regime, and for most owners the question never even arises.

What matters more than the regime is the mechanics: taxable profit is not the same as accounting profit. You start from the accounting result, add back expenses the law does not allow as deductions, and deduct income the law exempts. That is exactly the work done in the tax return package schedules, and it is where most disagreements arise during a tax audit.

What happens to a loss is the other structural point: it can be carried forward against future financial years, or, by election, carried back against a prior year’s profit — the carry-back — which creates a claim against the state.

In Odoo

Odoo produces the accounting result, not the tax result. The move from one to the other happens in the review tool or at the accounting firm.

What prepares this move well is how the chart of accounts is kept: isolating the usual non-deductible expenses — fines, certain gifts, the private-use share of a company car — instead of burying them, saves a tedious reconstruction at closing.

Common mistakes

• Taking the accounting result for the tax base.
• Discovering the add-backs at closing for want of having isolated the relevant accounts.
• Forgetting that a loss has value, and missing the carry-back election.