France: Finance Act 2019
France’s Finance Act has been legislated. The act includes the following key changes:
- The top rate of corporate tax has been reduced from 33.3% to 25%
- The implementation of the EU’s Anti-Tax Avoidance Directive (including a restriction on the deductibility of interest costs in certain highly geared companies/groups)
- A patent box regime
Other changes include: the end of tax consolidation for groups; an increase to the participation relief available for intra-group dividends; incentives for SMEs to automate; and a General Anti-Abuse Rule.
After the finance act was adopted, a proposal was submitted to temporarily suspend France’s plan to reduce the corporate tax rates. If ratified, the progressive reduction of the top rate of corporate tax will be suspended during 2019 and continue starting in 2020.