A finite element model has been developed to analyze the chip formation process and subsurface damage when machining the unidirectional \CFRP\ composites (carbon fiber reinforced polymer). The proposed approach is based on combined elastoplastic–damage model taking into account the stiffness degradation of mechanical properties in the material response. The plasticity generated by the fiber–matrix debonding and matrix cracking has been considered in the workpiece material during the cutting operation. This allows on one hand a better understanding of the physics of cutting phenomena occurring during the chip formation process (formation of several chips), and on the other hand to accurately predict the cutting forces and the damage induced by the cutting tool in the workpiece. The comparison between the obtained results and experiments shows a good agreement.