The 2014 Finance Bill was published 30 December 2013, containing the following measures as summarized in the KPMG link herein.
- Limitation for related party interest, if lender is not equal to a minimum of 25% of corporate income tax under French law
- Requirement to provide “analytical accounts” to the French tax authorities during a tax audit if certain thresholds are exceeded
- Requirement to provide “consolidated accounts” to the French tax authorities during a tax audit
- Repeal of a provision staying tax collection when a French taxpayer files a MAP case
Note the above provisions are in addition to a new employer tax of a 50 per cent levy on the portion of wages above 1 million euros in 2013 and 2014. Including social contributions, the rate will effectively remain about 75 per cent, though the tax will be capped at 5 per cent of a company’s turnover.
These significant provisions should be reviewed and monitored closely by MNEs with French operations, or contemplating entering the French market. Future tax measures should also be expected in France in an effort to improve their GDP and economic growth.