Howmet, a société par actions simplifiée (SAS), is the head of a tax group in which its subsidiary, Alcoa Holding France, now Arconic Holding France (AHF), is integrated.
Following an audit of the accounts of these two companies, the tax authorities corrected their taxable profits for the 2011 and 2012 financial years by disregarding the consequences of a contribution made to the Belgian company Alcoa Wheels Product Belgium (AWPB), now Alcoa Finance and Services Belgium (AFSB), of sums borrowed from the Swiss permanent establishment of a Luxembourg company belonging to the same economic group. It also reinstated the management fees paid by AHF to the group’s American parent company, Alcoa Inc., in AHF’s profits for the 2010 and 2011 financial years.
In a ruling handed down on 19 November 2020, the Montreuil Administrative Court upheld Howmet’s claim for discharge of the additional corporate tax resulting from the adjustments based on abuse of rights and the corresponding surcharges, and dismissed the remainder of its claim.
An appeal was then filed by the tax authorities to annul this Judgment.
Judgment
The Paris Administrative Court of Appeal, on appeal by the tax authorities set aside Articles 1 and 2 of the judgment of the Administrative Court and ordered Howmet to pay the tax, and dismissed its cross-appeal.
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