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France

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Tax authorities

Ministry of Economics and Finance (tax section)
Direction générale des Impôts DGI
139 Rue de Bercy, 75012 Paris
Tel: +33 1 53 18 95 00
Website: www.impots.gouv.fr

Tax rates at a glance

(As of August 31 2011)  

Corporate income tax rate 33.33% (a)
Capital gains tax rate 1.7%/15%/19%/33.33% (b)
Branch tax rate 33.33%
 
Withholding tax (c)
Dividends 25%
Interest 0% (d)
Royalties from patents and licences 33.33%
Branch remittance tax 25%
 
Net operating losses (years)
Carryback 3 years
Carryforward Unlimited
  • The standard corporate income tax (CIT) rate is 33.33%. Small and medium companies, at least 75%- owned by individuals and with a turnover less than €7.6million ($11 million) benefit from a reduced rate of 15% on the first €38,000, any excess being taxed at the standard rate. Large companies whose turnover is more than €7.6 milion are subject to an additional social surcharge of 3.3% levied on the corporate tax more than €763,000 leading to a 34.43% effective tax rate.
  • Capital gains are generally deemed to be ordinary income subject to the standard CIT rate (33.33% + 3.3% social surcharge). Different rates may be applicable depending upon the nature of the gain:
    - 1.7% on the sale of qualifying shares: under the participation exemption, 95% of the gains derived from the disposal of qualifying stakes in non-real estate companies are exempt. The remaining 5% is taxed at the standard rate, leading to a 1.7% effective tax rate,
    - 15% applicable to the sale of qualifying shares, the proceeds from the licensing or disposal of patents and gains made on the sale of interests in qualifying funds or VCs,
    - 19% applicable to the gains derived from the sale of listed real estate companies,
    - 33.33% applicable to the gains derived from the sale of non-listed real estate companies.
  • Internal withholding tax rates are usually reduced or eliminated under double tax treaties. Payments to EU parent companies may also be exempted (EU Directives). Payments made as from March 1 2010 to companies located in "non-cooperative countries" are subject to a 50% levy.
  • From March 1 2010, no withholding tax is levied on interest paid to non-residents.
The French government is preparing further corporate tax reforms, which are expected to take effect retroactively on January 1 2011:
  • Increase to 10% of the taxable portion of capital gain derived from the disposal of qualifying shares.
  • Carryback of NOLs limited to one year
  • Restriction of carry forward rules: NOLs may still be carried forward indefinitely but the annual offsetting would be capped to 60% of the taxable income of more than €1 million.

Source: Taxand advisers from Arsene-Taxand

Tax

The big change to tax law in France has been the alterations made to the thin capitalisation rules, which were introduced in 2007. Article 12 of the French Finance Act 2011, which was adopted in December last year, extends the provisions for interest ... [more]

Bredin Prat is the go-to law firm for big-ticket, transactional work. The firm has continued to expand this year, hiring two associates. Two more are set to join in November bringing the numbers up to 15.Renaud Streichenberger heads the practice and ... [more]

CMS Bureau Francis Lefebvre is viewed by the market as a leading tax practice in France. The firm comprises around 170 professionals, which is much bigger than most of its competitors in the legal sector. This means it can offer expertise in addition ... [more]

Arsene Taxand has grown again this year. The practice is headed by Frédéric Donnedieu de Vabres, who is noted in the market as a corporate tax specialist. He leads a team of 62 fee earners.The practice provides a full range of business tax services including ... [more]

With a team of 30 lawyers Baker & McKenzie is one of the larger tax practices in the Paris market. The group is headed by Véronique Millischer and comprises a number of well-regarded practitioners. Eric Meier in particular is singled out for his tax ... [more]

Clifford Chance is praised by its competitors for the strength of its transactional work. The group is also particularly strong in the fields of real estate and fund structuring. The tax practice comprises four partners and 13 other fee earners and is ... [more]

The tax team at Freshfields Bruckhaus Deringer has seen an increase in support work for the firm's corporate group. It has traditional strength in structured finance.Headed by Cyril Valentin, the group comprises eight feeearners. Eric Thomas has stepped ... [more]

Mayer Brown has a strong reputation in private equity and leveraged buyout work. The group has also seen an expansion in restructuring work this year.The team is led by Laurent Borey, who is also one of the five practice leaders, heading Mayer Brown's ... [more]

Taj

Taj is a firm of tax advisers and lawyers affiliated to Deloitte – tax and audit firms must operate independently in France – and has more than 370 professionals. Michel Aujean, the former director of tax analysis and policy at the European Commission, ... [more]

Allen & Overy is widely viewed as having a leading tax practice among law firms in the Paris market. Siamak Mostafavi is praised regularly for his capital markets and financial products work. Jean-Yves Charriau has joined this year from CMS Bureau Francis ... [more]

Cleary Gottlieb Steen & Hamilton's tax practice is led by Anne-Sophie Coustel and comprises three practitioners. Pascal Coudin, who works as a consultant, is highlighted by his peers for his cross-border structuring and corporate tax work. He is described ... [more]

Ernst & Young has cemented its reputation as having one of the strongest tax practices of the big-four this year. Eric Fourel heads a team of about 480, including legal. Cyril Maucour, formerly of Baker & McKenzie, has been appointed executive director ... [more]

The tax team at Gide Loyrette Nouel is led by Olivier Dauchez. There are nearly 20 fee earners. Guillaume Jolly has been promoted to partner this year.The practice has a broad range of specialities including transfer pricing, tax planning, structured ... [more]

Fidal Direction Internationale, a tax and legal affiliate of KPMG, is viewed in the market as particularly strong in providing a broad range of tax services including corporate tax, M&A, VAT and transfer pricing in several offices in France. Marc Crette ... [more]

Landwell & Associés's tax practice is headed by managing partner Michel Combe. He oversees a team of around 300 fee earners. The practice has expanded this year which has included opening an office in Toulouse as part of its attempts to be present in ... [more]

Latham & Watkins's tax practice is recognised by the market for its strength in structuring work for complex business transactions. Christian Nouel has left the practice this year but otherwise the team remains unchanged.The practice has advised on a ... [more]

Linklaters is one of the strongest tax law firms in France for transactional work. A number of their professionals are frequently mentioned in the market for being leaders in their fields. Head of tax Edouard Chapellier and Remi Montredon are subject ... [more]

Shearman & Sterling's tax practice is headed by Niels Dejean who is mentioned by his peers for his M&A work. The practice is particularly strong in transactional work, including reorganisations, M&A and private equity.Dejean advised a well-known German ... [more]

The tax practice at Skadden, Arps, Slate, Meagher & Flom is led by Philippe Derouin. He heads a team of three which focuses mainly on cross-border transactions and tax disputes work.This year the team has worked on a number of high-profile transactions ... [more]

Sullivan & Cromwell is noted by its competitors for its strength in transactions, particularly in M&A, restructuring and capital marketa. Despite its small size, Gauthier Blanluet's team of five has been involved in a number of important deals in the ... [more]

The tax practice at Willkie Farr & Gallagher is co-headed by Pierre Ullmann and Marie-Hélène Raffin. Raffin is often mentioned in the market as one of the leading French practitioners. "She is certainly one of the most well-known, if not the best practitioner ... [more]

Ashurst's tax practice comprises five professionals in total. The team is led by partners Catherine Charpentier and Nadine Gelli.The practice mostly focuses on transactions, where they work alongside the private equity and fund structuring departments ... [more]

August & Debouzy is a new entry in World Tax 2012. The tax group was formed by former professionals of PwC in 2005. Xavier Rohmer and Philippe Lorentz head the group.The team is large, consisting of 12 fee earners and is able to offer more advice on ... [more]

Cabinet Turot, a new entry this year, is a one-man law firm formed in 1993 by Jérôme Turot that specialises in tax litigation and tax controversies. Turot, a former member of the Supreme Court, is the subject of widespread praise. "He is the best in ... [more]

Darrois Villey Maillot Brochier's tax practice is headed by Yann Grolleaud, who is mentioned in the market as the key tax practitioner in their department. He leads a team of three. Alain Maillot is the only other partner.The practice is particularly ... [more]

De Pardieu Brocas Maffei is co-headed by Emmanuel Chauve and Bernard Boutemy. The practice comprises five partners and seven fee earners, and has a lot of experience across a range of tax areas including real estate, M&A, structured finance, litigation ... [more]

Hogan Lovells's tax practice comprises two partners, James Vaudoyer and Xenia Legendre, after the departure of Hervé Israel in February this year. The practice focuses on two main streams of work: financing institutions and M&A.This year the tax team ... [more]

Jones Day is viewed by the market as having a greater market presence than the size of its tax practice would suggest. Head of tax Vincent Agulhon is in the market for his corporate tax and litigation work. Emmanuel de La Rochethulon, the only other ... [more]

Moisand Boutin & Associés's tax practice comprises three partners, all former professionals at PwC.The group provides a broad range of corporate tax services and a number of the partners have specific expertise. Dorothée Traverse specialises in M&A structuring ... [more]

The tax team at Salans has a sector-centred approach to tax advice. This means the group serves as more than a support group for the firm's other practices.Head of tax Sandra Hazan represents clients in the luxury products industry. Partners Jean-Luc ... [more]

Weil Gotshal & Manges's tax practice is led by Stephane Chaouat and comprises four feeearners.The practice often works closely with the firm's other departments, especially in private equity work where the global tax practice has a strong reputation.Chaouat ... [more]

Winston & Strawn's tax practice is led by Jean Pierre Collet, who specialises in group restructuring. The team comprises 11 fee earners and four partners Florence Bilger and Franck Lagorce both specialise in real estate work, while David Colin focuses ... [more]

Brandford Griffith & Associés's tax practice is led by sole partner Roland Poirier. He advises mostly in M&A, group reorganisations and tax matters relating to financial instruments and real estate.Work includes advising a major French department store ... [more]

DLA Piper, a new entry, is one to watch over the next few years.Patrice Lefevre-Pearon joined as partner from Morgan Lewis in an attempt to increase the amount of standalone work the firm does. He joins Philippe de Guyenro, the only other tax partner ... [more]

Gibson Dunn & Crutcher's tax practice comprises two partners and is known for the strength of its cross-border transactional work, benefiting from the firm's strong global network. The practice is particularly strong in private equity and real estate ... [more]

A significant entrant to the French legal market is McDermott Will & Emery. The firm opened its office in Paris in May and launched a tax practice shortly afterwards withone partner, Hervé Bidaud, formerly of Hogan & Hartson and TruePartners Consulting, ... [more]

Nixon Peabody's tax practice comprises five professionals including two partners. Former partner Claire Deléris left in January this year to join Zodiak Media as in-house counsel.Benefiting from the firm's international network, the practice is seen ... [more]

Paul Hastings's tax practice is led by Allard de Waal. The group focuses on all areas of corporate tax including private equity business restructurings and structured finance. The group also provides tax services during audit and litigation.This year ... [more]

Taylor Wessing's tax team is led by partner Christophe Flaicher and comprises three feeearners in total.The practice provides a broad range of business tax services, mostly in relation to cross-border matters, including tax advice in relation to M&A, ... [more]

Tirard Naudin is a boutique tax practice specialising in international tax and estate planning. The practice consists of two partners.Jean-Marc Tirard, a former member of the French tax administration, focuses on international corporate tax issues and ... [more]

Veil Jourde's tax practice is led by Christophe Delrieu, who joined last year from Gide Loyrette Nouel and specialises in international tax, particularly group restructuring.The practice provides largely support work for the firm's other departments, ... [more]

White & Case's tax practice comprises seven fee earners in total and is headed by Norbert Majerholc. Fellow partner Alexandre Ippolito is highlighted for his M&A work.The tax practice advises across a broad range of business tax areas and is seen as ... [more]

See also

France
Western Europe

Firm contact details