Can the territorial economic contribution (TEC) be capped?
Verified 01 January 2026 - Company Public Service / Directorate of Legal and Administrative Information (Prime Minister), Ministry of Finance
Companies can benefit from a relief when the sum of their CFE and CVAE is greater than 1.531% their added value. We are talking about capping the CET. The application for the 2025 rebate must be submitted by December 31, 2026.
Warning
Pending the adoption of a budget for 2026, the special law no. 2025-1316 of 26 december 2025 ensures the operation of public services. It extends the 2025 budget provisions until the adoption of a 2026 budget law.
In the meantime, the information presented in this sheet, and in particular the rates and values, remain valid.
How is the rebate calculated?
The cap rate shall be 1.531% of added value produced by the company in 2025.
The value added amount shall be determined in accordance with the rules laid down for the calculation of the CVAE = Retainable income - Chargeable expenses.
The reference period used to assess value added shall be one of the following periods:
- The taxation year, if the accounting period coincides with the calendar year
- That is, the last 12-month fiscal year ended in the year, if the accounting year does not coincide with the calendar year.
The relief of which the company benefits is calculated using the formula:
Company Property Tax + Business Value Added Tax - 1.531% of added value
On the other hand, the relief may not have the effect of reducing the CET due to an amount less than minimum CFE contribution set by the municipality on which the company depends.
Example :
A company has the following characteristics:
- Turnover = €400,000
- Added value = €20,000
- CFE = €600
- Company not liable to the CVAE (because CA: titleContent less than €500,000)
The minimum CFE contribution is set at €400 by the municipality.
The cap rate shall be equal to 1.531% value added, i.e. 20 000 x 1.531% = €306.20.
The reduction is therefore: 600 - 306,20 = €293.80.
However, the CET due after deduction may not be less than the minimum CFE contribution. Thus, the amount of the relief (€293.80) granted to the company may not exceed the difference between the amount of the CET and the amount of the minimum contribution of CFE, i.e.: 600 - 400 = €200.
The calculation does not consider the following :
- Tax credit for companies located in defense restructuring areas (ZRD)
- Relief for cessation of activity
- Consular taxes or fees for Chambers of Commerce and Industry (CCI) and Chambers of Crafts and Crafts (CMA) (for micro-entrepreneurs or for individual businesses and entrepreneurs).
Half of the relief obtained or expected for year N-1 may be deducted in advance from the CFE deposit for year N under the responsibility of the taxpayer. The expected tax year allowance can also be subtracted from the CFE balance for the same year.
How do I claim a rebate?
The company must apply for the rebate before 31 December of the year following the assessment of the CFE.
The form to be submitted differs under the tax system.
General case
The company uses the form n°1327-CET-SD.
Application for relief (CET) - form n°1327-CET-SD (real profit)
Micro-BIC or micro-BNC regime
The company uses the form n°1327S-CET-SD.
Application for relief (CET) - Form n°1327S-CET-SD (micro-companies)
The request is sent to the company Tax Office (SIE), which is responsible for its principal place of business.
This request is a complaint and no longer has to be accompanied by a copy of CFE's tax notice.
Territorial economic contribution (TEC) ceiling
Method of calculating added value