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France: Introduction of Exceptional Corporate Income Surtaxes
12/20/2017
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.