The conundrum of introducing a 15% minimum tax in French companies

At 406 pages, the Finance Bill 2024 is “the densest in history“, jokes Minister for the Budget Thomas Cazenave. This exceptional length is due to one article in particular: Article 4. The transposition of the European directive on the minimum taxation of 15% for multinational companies, covering 10% of the bill, promises to be a nightmare for tax professionals.

Specifically, this new tax applies to French groups with an annual turnover of more than 750 million. According to Berca, more than 570 companies could potentially fall under the scope of this new measure. However, this does not mean that everyone will have to pay this additional tax. In effect, the purpose of the mechanism is only to recover the “difference” between the foreign subsidiary’s income tax rate and this minimum rate of 15%. So if a French group declares in the state where the corporate tax rate is applied…