Internation issues

Publié le 28 novembre 2014 | par Nathalie Mourlot

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“Horizontal” fiscal unity: consider filing a claim…

… before 31 December 2014, against the corporate income tax liability paid in respect of fiscal years closed on 31 December 2011 !

 

By Pascale Prince 

Partner at Denjean & Associés                                                             

Following the court case rendered by the ECJ on 12 June 2014 on the Dutch fiscal unity regime, the French Amended Finance Bill for 2014 which has recently been presented to the French National Assembly includes a proposal to allow the tax consolidation regime between French sister companies having a common parent company established in an EU member State or in an EEA state if the EEA state has concluded an administrative assistance agreement with France.

Indeed, in its decision rendered in June, the ECJ ruled that a regime (as the French fiscal unity regime), restricting tax consolidation to the subsidiaries of a parent company established in the same EU member state constitutes a restriction of freedom of establishment.

What is the impact for international groups having French sister companies with a common parent established in the EU?

If adopted, which is most likely, the proposal will allow horizontal consolidation between French sister companies starting from tax years ending on 31 December 2014.

As regards fiscal years closed in 2011, 2012 and 2013, French profit making companies should consider the possibility to file a claim to obtain the refund of the corporate income tax liability which would  have been avoided had a tax consolidation with a loss making sister company be possible. For fiscal years closed on 31 December 2011, the deadline to file a claim against the corporate income tax liability paid in 2012 will end on 31 December 2014. Chances of success of those claims are quite high considering that the objective of the Draft Amended Finance Bill is to have French legislation being compliant with EU law.

For the future, French sister companies which intend to benefit from the “horizontal” fiscal unity regime, should make the appropriate elections in the applicable deadlines, after having checked that they comply with all conditions to benefit from the regime.

For more information, please contact :
Pascale Prince
pascale.prince@denjeansa.fr
Tél : 01 45 02 20 05


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