This article was first published on Tax@Hand, and is reproduced on this blog with the authorization of its authors. The Administrative Court of Appeal of Paris ruled on 1 March 2024 that the French horizontal tax consolidation regime is not contrary to the nondiscrimination clause of the France-Switzerland tax treaty. Background and facts of the case As a reminder, the French horizontal tax consolidation regime was introduced in France in 2014, following the decision of the Court of Justice of the European Union in SCA Group Holding and Others (12 June 2014, joined cases C-39/13, C-4 ..read more

The 2024 French Finance Bill, officially known as law n°2023-1322, was passed on December 29, 2023. It brings in new regulations aimed at strengthening the requirements for transfer pricing documentation and empowering the French Tax Authorities (FTA) to oversee transactions involving Hard-To-Value Intangibles (HTVI). This bill introduces three key measures concerning HTVI: Allowing the FTA to use ex-post financial data to assess the value of HTVI. Extending the statute of limitation period for HTVI-related transactions from 3 to 6 years (the standard limitation period in France). Granting th ..read more

What is the change? Pursuant to the Finance Law n°2022-1726 dated December 30th, 2022, for 2023, the transfer of the management and collection of “employer tax” from OFII (Immigration Office) to the tax authorities (DGFIP) took effect on January 1, 2023. As a reminder, the liable party is an employer who hires foreign workers or hosts seconded employees to France for a salaried professional activity. The tax applies upon their first admission to France. The hiring of EU nationals is exempted from this employer tax. Since the tax is to be declared and paid annually in arrears, the first formali ..read more

The 2024 French Finance Bill (law n°2023-1322) was adopted on December 29, 2023, and has introduced new measures reinforcing transfer pricing documentation requirements as well as the power of control by the French tax authorities (FTA) of transactions related to hard-to-value intangibles. French Tax Reforms: tighter transfer pricing documentation Rules and enhanced possibilities for the FTA to audit and adjust hard-to-value intangibles (HTVI) related transactions Transfer pricing documentation requirements have been amended: by lowering to €150 million (instead of €400 million previously) th ..read more

This article was first published on Tax@Hand, and is reproduced on this blog with the authorization of its authors. France’s list of noncooperative states and territories (NCSTs) was updated on 17 February 2024 to add Antigua and Barbuda, Belize, and Russia and to remove the British Virgin Islands. The Ministry of Finance updates the NCST list every year. As a reminder, since 1 January 2010, defensive tax measures apply to jurisdictions on the list, including, for example, the non-application of the French participation exemption regime, increased withholding taxes on outbound payments, and th ..read more

While the valuation of unlisted shares is a classic and recurring exercise in finance, the choice of the applicable valuation method and its many variables (discounts, etc.) remains at the heart of litigation debates before the French courts.  Lire l’article en français In the context of international transactions, investors from one country may be invited to invest in securities of companies located in another country. Whilst it is best practice that the valuation exercise should reflect any country-specific requirements or nuances, often, in practice, the value of such securities is det ..read more

The first DAC7 reporting campaign concluded in France on January 31, 2024. However, it was not without its challenges, and several operators encountered difficulties during the process. A Technical Challenge: Filing the Report Based on our field experience, we’ve observed that IT constraints regarding file format (requiring taxpayers to submit a compressed .XML file in gzip format) and the method required to encrypt the file have led to challenges in meeting reporting obligations. The French tax authorities’ portal has generated several anomaly messages in response to report filings, contribut ..read more

On 9 January 2023, Marie-Anne Barbat-Layani, the new Chair of the Autorité des marchés financiers (“AMF“), presented her best wishes to the financial center. As usual since 2018, this event enabled the regulator to recall the 2022 highlights, and to present its priorities for action and supervision for 2023, the year marking 20 years of the AMF’s existence. The AMF was keen to reiterate its primary objective to ensure investor protection, the provision of accurate information to investors and the markets’ smooth working, particularly in light of the FTX affair that broke out in 2022, and the p ..read more

For credit institutions, the management and restructuring of their non-performing loans (“NPLs”) and the possibility to sell these NPLs are essential to preserve financial stability, by reducing their balance sheets in line with prudential requirements and encouraging lending activity (by promoting the emergence of a secondary market NPLs in the Union and facilitating cross-border operations). In line with these objectives, the European Union adopted Directive (EU) 2021/2167 of 24 November 2021 on credit servicers and credit purchasers (the “Directive“). The Directive was transposed into Frenc ..read more

French Law No. 2023-973 of 23 October 2023 on the green industry (the “Law”) has been published in the Official Journal of the French Republic No. 0247 of 24 October 2023. This Law aims at making France the leader in both green industry and technologies in Europe, and in existing green industries. The Law is an integral part of the French response to the environmental challenge of decarbonization, which is part of the national low-carbon strategy (“SNBC”), and to the economic challenge raised by industrial job creation. The scope of the Law, spread out between 40 articles divided into 3 Titles ..read more