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  • Service: Tax, International Corporate Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/26/2012

France - Legislative update of tax proposals in pending legislation 

October 26:   The National Assembly this week passed the first part of the draft Finance Act for 2013 (Loi de Finances 2013), and thus its consideration of other provisions in the pending legislation will continue.

Once this first part of the legislative process is completed, the bill will move forward and further discussions will take place when it is before the second chamber of the Parliament (at which point, additional changes could be adopted).

Measures already adopted

Of the measures of the draft Finance Act approved by the National Assembly, the following now reflect amendments made to the government’s initial draft of the legislation:


  • Limitation on the deduction of interest: “Standard rent” (unlike financial leasing) would no longer be taken into account (unless relating to related parties) in determining the amount of “net interest” to which the new interest deduction limitation would apply. Moreover, the legislation now explicitly indicates that net interest expenses to which the limitation applies would include both rents paid and rents received—which was unclear under the government’s initial draft of the legislation.
  • Temporary 5% surcharge on corporate income tax extended until 2015: The 5% “surcharge” for corporate income tax purposes, that is to apply until financial years ending on 3 December 2013, would be extended until 2015.
  • Taxation of capital gains on shareholdings realized by individuals: The taxation of capital gain would continue to benefit from a “flat tax rate” under certain conditions (e.g., gains realized with respect to shares connected with the professional activity of the seller, etc.). Also, capital gains subject to the “progressive tax rate” could benefit from an allowance—which would be based on the holding period (that would now be computed as from the date of acquisition, even for capital gain realized before 2013).


For more information, contact a tax professional with FIDAL*


Olivier Ferrari
Tax Partner

+33 (0)1 55 68 14 76


Patrick Seroin
Tax Partner

+33 (0)1 55 68 15 93


Gilles Galinier-Warrain
French Tax Center, KPMG LLP, New York

+1 212-954-8605


* FIDAL is an independent legal entity that is separate from KPMG International and its member firms.



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For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.
 

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