France

Corporate taxation

The corporate tax rate in France is

2013 33.33%
2014 33.33%
2015 33.33%
2016 33.30%
2017 33.33%
2018 33.00%
2019 31.00%
2020 28.00%
2021 26.50%
2022 25.00%

For financial years opened as of 1 January 2021, a reduced CIT rate of 15% that applies for small corporations on their first EUR 38,120 of taxable profits (according to the French Tax Law definition) is extended to the corporations realising a turnover up to EUR 10 million (compared to EUR 7.63 million for financial years opened before 1 January 2021).

A social surcharge is due by any corporation at the rate of 0.16% assessed on the revenue excluding VAT and after deduction of a EUR 19 million relief.

Special corporate tax incentives

The French Patents and royalties regime allows companies paying French corporation tax to pay a reduced rate of 15% (instead of 26.5%) on patent and royalties income as they are treated as a long term capital gain. If the licensee is a French corporation and actually uses the qualified IP licensed, the licensee may deduct the royalty payments from its income taxable at the standard 26.5% rate even if the licensor is taxed at the reduced 15% rate.

Transfer pricing

The following main statutory rules regulates transfer pricing:
Section 57 of the French tax code (CGI – Code Général des Impôts).
The concept of acte anormal de gestion (an abnormal act of management) also allows the FTA to deny tax deduction for expenses which are not related to normal acts of management or could not be deemed to have been incurred for the benefit of the business. The courts decide whether this concept applies by comparing the commercial practices of the company under review with what they judge to be ‘normal’ acts of management.

Sections L 13 AA, L 13 AB and L 13 B of the tax procedure code, which set out transfer pricing documentation requirements.
Section L 188 A of the tax procedure code.

Links

Transfer Pricing Case Law

Case NameDescriptionDateCountryKeywords