The French Parliament adopted several new corporate tax, individual income tax and tax litigation measures in the Finance Bill for 2020, which was passed on 28 December 2019. Most of these new tax rules came into force on 1 January 2020. This is the second of a series of three linked articles focusing on specific aspects of France’s 2020 Finance Bill we believe will be of the special interest to our readers. This article discusses the impact the new bill will have on corporate transactions and the management of large French corporations.
Favourable measures for mergers
- The 2020 Finance Bill extends the tax-free regime to mergers between sister companies under the new simplified legal regime adopted in 2019. This new rule applies retroactively from 21 July 2019.
- The transfer of tax losses from the absorbed company to the absorbing company is subject to a tax ruling in certain circumstances. The 2020 Finance Bill allows the transfer of tax losses which do not exceed €200,000 without a tax ruling in certain circumstances.