France: Finance Act for 2014 - amending law for 2013 company taxation



The Finance Act for 2014 was adopted by the French Parliament on December 19th 2013 and was published in the French Official Journal on December 30th 2013.

Corporate Tax

Exceptional contribution on corporate tax

  • Companies with turnover exceeding €250 M are subject to the exceptional contribution on corporate tax which increases from 5% to 10,7%. This new rate applies to fiscal years ending from December 31st 2013. Thus, the corporate tax rate for companies with turnover exceeding €250 M stands at 38%.

Interest  paid to affiliated companies

  • A new legislative framework which limits the deductibility of financial charges has been set up. This new provision cancels the deductibility from the taxable result of interest on loans paid to affiliated companies when said interest is not, at the level of the lender company, subject to taxation at least equal to the quarter of the tax that should be paid under common conditions (i.e. in practice 8,43%, for companies subject to corporate tax or an equivalent tax). The lender company can be either a French tax resident or a resident of another country. This provision applies to profits made after December 31st 2013.

Allocation of foreign deficits of SME’s

  • For fiscal years ending from December 31st 2013, the law providing the tax regime for SMEs which allowed SMEs, subject to corporate income tax, to deduct from their taxable income tax losses suffered by their permanent establishment or subsidiaries established abroad.

Tax on high revenues

  • A tax on high revenues has been set up by the law. This tax is calculated by applying a 50% rate to the fraction of individual remunerations likely to be tax deductible from net corporate income and which exceed €1M (wages, salaries, equivalent incomes and all benefits in-kind or in cash, attendance fees, pensions, supplemental retirement benefits, allowances, allocations or equivalent benefits attributed on retirement, sums allocated to employee share scheme, profit-sharing and employees saving plans, stock-options, restricted shares, business creator shares and reimbursement to other companies of remuneration mentioned above). Said amount cannot exceed 5% of the turnover for the fiscal year for which it is due. The tax should be calculated company by company, even for groups of companies. Moreover, this measure applies to remunerations received or allocated in 2013 and 2014. This tax should equally apply to foreign companies which have a subsidiary or a permanent establishment in France and to French companies which have employees abroad.

Transfer pricing

Documentary requirements

  • Transfer pricing documentary requirements, for large companies, (i.e. with turnover exceeding €400 M) are strengthened. As a reminder, since January 1st 2010, said companies must make the transfer pricing documentation available to the authorities.   The law extends the list of information to be included in the documentation and indicates that foreign administrative rulings concerning affiliated companies of the company subject to documentary requirements must be also provided.


Provision of the analytical accounting and of the consolidated accounts of audited companies

  • An obligation to report analytical accounting and consolidated accounts has been set up by law for large companies, which already have to provide that kind of documentation and which are subject to a tax audit by the French Tax Administration (FTA). Failure to provide such documentation is subject to a fine of €1 500.

Miscellaneous taxes

Payroll tax

  • The law excludes gains corresponding to the exercise of stock-options and free shares from the payroll tax base. This measure applies from January 1st 2014.

Direct local taxes

Company real estate contribution

  • The law implements a new scale for the calculation of company real estate contribution. The new scale consists of 6 brackets instead of the previous 3 brackets.  At the same time, the exemption from the company real estate contribution for self-employed workers is removed; they are subject to the same tax regime as other taxpayers.


The Amending Finance law for 2013 was published in the French Official Journal on December 30th 2013.

Investment in innovative SMEs

  • The law implements an exceptional 5 year depreciation measure on  sums paid by companies subject to corporate income tax, concerning some capital share  subscriptions paid directly (by cash  contribution) or indirectly (through a fund) to innovative SMEs. This measure should apply from a date to be fixed by decree.

Tax credits  

Tax credit for the creation of video games

  • The law provides an extension of the scope of the tax credit for the creation of video games. This measure applies to tax credits calculated for fiscal years beginning from January 1st 2014.

Cinema tax credit

  • The cinema tax credit rate is increased to 30% for cinematographic works with a budget lower than €4 M. This measure applies to tax credits calculated for fiscal years beginning from January 1st 2014.

Research tax credit

  • The research tax credit debt can henceforth be transferred to securitization entities.

Real estate companies

Real estate investment companies

  • SIICs distribution obligations are raised. They now have to distribute at least 95% of property lease profits, compared to 85% previously, and 60% of capital gains made on the same assets (50% previously). In return, SIICs are definitively exempted from the 3% contribution on distributed revenues for the sums imposed for distribution by the law.