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France: Updated list of tax-abusive structures and schemes

On 1 April 2015, the French tax authorities announced several measures aimed at improving legal certainty for individuals and businesses. To be more specific, the tax authorities published a list of practices and transactions that are deemed to be abusive:

 

  • Making abusive use of management packages
  • Deduct dividends from the taxable result through the issuance of convertible bonds
  • Relocation of profits to more favorable locations through business reorganisations
  • Unjustified payment of commission to residents of low-tax jurisdictions
  • Fictitious reduction of taxable net wealth
  • Not reporting wages received on foreign bank accounts
  • Misappropriation of commissions by the director of a company
  • Fictitious offshoring of staff
  • The abuse of tax treaties
  • Using EU conduit companies to achieve a withholding tax exemption on dividends paid to non-EU residents
  • Double interest deductions within an international group
  • Using foreign companies to avoid gift tax due on donations of shares in French companies
  • Non-application of VAT to hidden supply of service
  • Abuse of the equity savings plan (Plan d'Epargne en Actions, PEA)
  • Abusive of the PEA through the interposition of a legal entity
  • Non-resident companies that do not charge VAT to online sales
  • Not including certain income in the calculation of the net wealth tax limitation.

The list published by the French tax authorities will be updated on a frequent basis.

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