From France: French Parliament Adopts Corporate Income Tax Surtaxes
Stéphanie Desprez and Denis Fontaine-Besset - STCPartners, a member firm of Andersen Global
On November 14, 2017, the French Parliament definitively adopted a draft bill introducing exceptional corporate income tax surtaxes for companies having gross revenue exceeding €1 billion.
On November 2, 2017, the government presented a draft bill introducing two exceptional corporate income tax (CIT) surcharges for fiscal years ending between December 31, 2017, and December 30, 2018. These CIT surcharges are aimed to partly compensate an estimated €10 billion cost as a result of the invalidation by the French Constitutional Court of the 3% tax on dividend distributions.
- French taxpayers with turnover exceeding €1 billion would be subject to an exceptional CIT surcharge equal to 15% of the gross amount of CIT owed by the taxpayer (before being offset by any tax credit or tax reductions) so that they would be subject to an overall CIT rate of 39.43%.
- French taxpayers with turnover exceeding €3 billion would be subject to an additional CIT surcharge equal to 15% of their CIT liability (again before taking into consideration any offsets of tax credits or tax reductions), so that they would be subject to a total surcharge of 30% of their gross CIT liability and an overall CIT rate of 44.43%.
For French consolidated tax groups, the €1 billion/ €3 billion threshold would be applied at the level of the tax group.
An installment representing 95% of the surtaxes will be payable together with the final CIT installment, which is due on December 20, 2017, for companies ending their fiscal years on December 31, 2017. Tax credits or reductions, as well as tax receivables of any nature, would not be allowed as offsets against the exceptional or additional CIT surcharges.
The bill will be shortly enacted unless it is submitted to the French Constitutional Council.