France: Introduction of Exceptional Corporate Income Surtaxes

Amendments and guidelines were recently published regarding the two new corporate income tax (CIT) surtaxes for large companies that had been introduced in early November. The major points include:

• A smoothing mechanism for companies with total turnover that only slightly exceeds the surtaxes' thresholds. If turnover is between €1 billion and €1.1 billion, then the 15% surtax must be multiplied by the following ratio: [(turnover – €1 billion) / €100 million]. If turnover is between €3 billion and €3.1 billion, the 15% surtax must be multiplied by [(turnover – €3 billion) / €100 million].
• Turnover must be appreciated at the company level or, within tax-consolidated groups, at the level of the head company of the group.
• Turnover thresholds must be appreciated with respect to the turnover relating to projects that are subject to French CIT only, and not global turnover.
• Exceptional surtaxes are not deductible from the CIT base.
• Companies with fiscal year between December 31, 2017, and February 19, 2018, must pay the exceptional surtaxes instalment no later than December 20, 2017. Payment of this instalment, roughly 95% of the surtaxes, is to be paid together with the final CIT instalment.