Estonian accounting for French companies and residents

What is the first question to ask?

For a French resident, the first question is where the company is actually run, before the Estonian tax rate. Article 209 of the Code général des impôts (CGI), the French tax code, applies French corporate tax (impôt sur les sociétés, IS) to the profits of businesses operated in France. A company registered in Estonia but in fact run from France can therefore be taxed in France.

The place of effective management (siège de direction effective) is where the day-to-day and strategic decisions are actually taken. The typical case where the French tax authority places it in France is a sole director who lives in France and makes the decisions from home.

Why do articles 209 B and 123 bis usually matter less?

For an Estonian company with a real activity, these two rules are usually not the main question, because Estonia is an EU member state.

Both articles deal with foreign entities under a privileged tax regime. For an entity in another EU member state, article 209 B applies only to artificial arrangements set up to avoid French tax (montage artificiel). Under article 123 bis, the taxpayer can escape the rule within the EU by showing there is no artificial arrangement.

The page on a French resident who owns an Estonian company covers the detail. Our article on where an Estonian company is actually taxed gives the wider background.

Who does an Estonian company help?

It helps French companies with a real operation in Estonia. That is usually the case when:

• your French group has a real Estonian subsidiary, with its own premises or customers,
• the company employs staff in Estonia and needs payroll under Estonian law,
• it is registered for VAT in Estonia and files a return every month,
• the activity actually takes place in Estonia, and the decisions are made there.

In those cases you need books kept under Estonian law, Estonian filings made on time, and someone who knows both sides. That is our work.

Who does it usually not help?

It rarely helps a French resident who runs the company alone from home and expects it to lower their French tax.

In that case, the main questions are where the company is managed and, for a consultant, article 155 A of the CGI. That article covers amounts paid to a foreign entity for services rendered by a person in France. They can be taxed in that person's name, in particular where the person controls the entity. We do not promise a tax saving. We would rather say so before the company exists than after.

What should you check before going further?

Four questions usually show whether an Estonian company makes sense for you:

1. Do the directors and decision makers live and work in Estonia?
2. Does the company have its own staff, customers or suppliers there?
3. Does it have, or will it have, an Estonian VAT registration and monthly returns?
4. Would it make sense even if it changed nothing in what you pay in France?

If the answers are no, the main issue is where the company is managed, not bookkeeping.

If the answers are yes, the Estonian company is a real operation. Its accounting then has to be done properly under Estonian rules, and that is where we can help.

Which questions do we not answer?

French tax questions belong with your expert-comptable or an avocat fiscaliste. We raise them, but we do not answer them:

• Where is the place of effective management of the company in practice, and how would you show it?
• Does the company have a permanent establishment in France, meaning a fixed place of business there that France can tax?
• Does article 155 A apply to the amounts the company invoices?
• How should services between the French company and the Estonian one be treated?

Which Estonian figures should you know?

Three points matter most: corporate tax of 0% or 22%, VAT at 24%, and the annual report by 30 June.

• Corporate income tax: 0% on retained and reinvested profit and 22% on distributed profit. The tax is 22/78 of the net amount paid out.
• VAT: 24% since 1 July 2025, with a registration threshold of 40,000 EUR. The VAT return (KMD) is due by the 20th of the following month.
• Annual report: by 30 June.

How do we work with your expert-comptable?

We speak to your expert-comptable directly once you give us permission. Together we agree the chart of accounts, the reporting format and the dates. The Estonian figures then reach your accounts and the group consolidation without rework. We pass French tax questions on to your expert-comptable.

What do we do on the Estonian side?

We do the monthly bookkeeping, file the VAT returns, run payroll, and prepare and file the annual report. The two pages below cover the French resident who runs an Estonian company, and the day-to-day accounting with our prices.