To find out if your company is located in an urban free zone, you can consult the list of municipalities located in ZFU.

How do you know if your municipality is located in ZFU (free urban zone)?

Companies wishing to benefit from the income tax exemption may ask the tax authorities beforehand to verify their eligibility for this aid. In the absence of a response within the 3-month period, the silence of the tax administration is deemed to be tacit acceptance.

Any company that meets all of the following conditions is entitled to the scheme:

• Implant an activity in a ZFU-TE between 1^er January 2015 and the December 31, 2025 . The company must have an activity room (business, cabinet, workshop). The company must also have the means to operate in order to carry out an economic activity and generate professional income. Business creation can also come from the transfer of an activity previously carried out outside the ZFU.
• Engage in a commercial, craft, industrial or liberal activity
• Employ up to 50 employees (49 employees for companies set up since 1^er January 2019)
• Have a turnover or a profit less than €10 million
• Holding of capital less than or equal to 25% capital or voting rights from businesses not meeting the definition of SME
• Respect a geographically determined employment or hiring clause. This means that it must, at the end of the accounting year, complete one of the following two conditions :
  
  • At least 50% employees on permanent contracts (permanent contracts) or fixed-term contracts (fixed-term contracts) of at least 12 months resident in a ZFU-TE or a City Priority Area (QPV)
  • At least 50% of employees hired as of 1^er January 2015 on a permanent or fixed-term contract of at least 12 months since the company's establishment resident in a ZFU-TE or a City Priority Area (QPV)

 the creation of an activity in the ZFU resulting from the transfer of an activity previously carried out outside that zone may benefit from the exemption,

Certain activities carried out by the company do not qualify for the exemption profits. These are companies engaged in the following activities:

• Automotive or Shipbuilding
• Manufacture of textile fibers
• Iron and steel
• Road freight transport

The exemption from income tax is fixed at:

• 100% for the first 5 years
• 60% during the 6^e year
• 40% during the 7^e year
• 20% during the 8^e year

Profits from activities outside a ZFU-TE are excluded from the exemption.

Tax relief cannot exceed €50,000 per 12-month period, not to exceed €300,000 over three years.

This ceiling shall be increased by €5,000 per new employee residing in the neighborhood and hired full-time for at least 6 months.

If the exemption follows a transfer, takeover, concentration or restructuring of activities that have already benefited from the tax relief, the tax relief continues for the remainder of the period.

The company that benefits from the profit exemptions falls within the scope of the European de minimis aid.

Minimis are financial aid granted to a company by a public authority (government, local authority, public institution, etc.). The total amount of aid must not exceed €300,000 over 3 fiscal years according to the application of the de minimis rule.

The period must therefore include the current fiscal year, as well as the 2 previous fiscal years. Compliance with this ceiling shall be assessed at the time of the granting of each new de minimis aid. For each new de minimis aid granted, account must be taken of the total amount of aid de minimis granted in the previous 3 years.

Beyond this amount, the aid must be notified to the European Commission.

The company must make the step in the first 6 months of its implementation in ZFU-TE.

To do so, it must send a statement of determination of its exempt profit drawn up on free paper attached to its income statement to the company Tax Service (SIE).

Without a response beyond 3 months, the exemption is considered accepted.

In the case of a hiring, the company must transmit to Urssaf via the website net-companies.fr a pre-hiring declaration (DPAE):

Pre-employment declaration (PRE-EMPLOYMENT DECLARATION) online

Finally, the company must make a specific hiring declaration to the Urssaf and the Dreets: titleContent, no later than 30 days following the effective date of the employment contract.