The New Tax Scheme France Ruralités Revitalisation

The France Ruralités Revitalisation (FRR) tax scheme has been introduced to replace the former Zones de Revitalisation Rurale (ZRR) from 1 July 2024 and support rural development.

The new scheme aims to boost the attractiveness of rural areas in France, by offering a range of tax and social benefits to businesses located in these zones. This article explores the zoning of the scheme and the benefits it offers.

Zoning for the France Ruralités Revitalisation scheme

The France Ruralités Revitalisation scheme has two zoning levels: FRR ‘socle’ and FRR ‘plus’. The ‘base’ zoning covers more than 17,700 communes in mainland France and the French overseas territories, while the ‘plus’ level is intended for communes with the greatest economic and social difficulties.

• Selection criteria: FRR zones are determined mainly on the basis of population density and disposable income per inhabitant. This zoning will be revised every six years to adapt to economic and demographic changes.
• Classified Communes: Thirteen départements are entirely classified as FRR zones, with the exception of certain large towns such as Gap and Nevers, which exceed the 30,000 population threshold required for classification.
• FRR+ zones: This additional zoning, which will come into effect from 2025, is intended for the most disadvantaged communes, offering increased aid to stimulate their economic development.

The number of communes eligible for these benefits is much greater than in the previous ZRR zoning classification.

The scheme also applies to the French overseas departments: all the communes in French Guiana and the communes on Réunion covered by ‘Décret n°78-690 du 23 juin 1978 portant création d'une zone speciale d'action rurale dans le département de La Reunion’.

You can use the interactive map to check whether your commune qualifies for this new scheme.

The advantages of the France Ruralités Revitalisation scheme

The FRR scheme offers a range of tax and social benefits to businesses located in these zones, designed to encourage economic activity and employment in rural areas.

• Tax exemptions: Companies set up or taken over in an FRR zone benefit from a total exemption from income tax (impôt sur le revenu IR or impôt sur les sociétés IS) for 60 months, followed by a degressive exemption over the next 36 months. This measure applies to industrial, commercial, craft and non-commercial businesses, including the self-employed. However, agricultural businesses cannot benefit from this scheme. It will, however, be available for tourism activities, for example.
• Social security exemptions: In addition to tax benefits, companies can benefit from social security exemptions, which reduce the cost of employment and encourage recruitment in these regions.
• Support for local authorities: The scheme also provides for an increase in the overall operating grant for local authorities, with a 30% bonus for the town-centre fraction and a 20% bonus for the rural solidarity grant.
• CFE exemption: Companies can also benefit from a temporary and optional exemption from the business property tax (CFE), subject to a decision by the local authorities or their EPCI.Exemption from property tax on built-up properties: This is also subject to a decision by the municipalities or communities of municipalities.

Impact and outlook

This reform was adopted as part of the 2024 Finance Act, with a planned entry into force date of 1 July.  The official decree classifying the municipalities was published on 19 June 2024. It will be reviewed every 6 years.

The France Ruralités Revitalisation scheme represents a significant step forward in support for rural areas in France. By offering tax and social security incentives, it aims to attract new businesses, thereby creating jobs and stimulating the local economy.

However, like any scheme, its effectiveness will depend on its implementation and the commitment of local players.

In conclusion

The France Ruralités Revitalisation scheme marks an important step in the revitalisation of rural areas in France. Replacing the former ZRRs, it provides a framework better suited to the current needs of rural areas, with greater support for the most vulnerable communes. Let's hope that this scheme will provide the leverage needed to revitalise these regions and enable them to prosper in the years to come.

Find out more : 

France Ruralités Revitalisation: new zoning to support rural areas - Frequently Asked Questions.