CVAE: further postponement of its abolition (art. 15)
The bill provides for a further postponement of the abolition of the CVAE (tax on added value of businesses), which was due to take place in 2027.
The 2024 CVAE tax rates would thus be maintained from 2025 to 2027 (with a maximum rate of 0.28%). This rate would then be reduced to 0.19% in 2028, 0.09% in 2029, with the complete abolition of the CVAE scheduled for 2030.
Tax consequences of the legal reform of mergers and similar operations (art. 17)
The preferential corporate income tax regime for mergers would be extended to the new case of mergers without exchange of shares introduced into French commercial law by an Ordinance of May 24, 2023.
In practice, the new rule would apply to cases where the shares are held by the shareholders of the merging companies in the same proportions in all the companies concerned, when these proportions are maintained at the end of the transaction. Furthermore, in the event of a partial division, as introduced into domestic law by the aforementioned ordinance, the allocation of shares in the transferee company to
members of the transferring company, either directly by the latter or via the transferring company, would not be considered as a taxable distribution. These measures would apply retroactively to transactions filed with the commercial court clerk's office on or after July1, 2023.
Reform of Pillar 2 rules (art. 13)
The regime set out in the French tax code for the purpose of transposing Directive (EU) 2022/2523 on ensuring a global minimum level of taxation of 15% for multinational enterprise groups and large-scale domestic groups in the Union would be adjusted. For financial years ending on or after December 31, 2024, the administrative guidances published by the OECD, the purpose of which is to specify or clarify the application of the GloBE model rules, would be transposed into domestic law to ensure that the minimum taxation system set up under French law complies with the OECD corpus and is thus recognized by our partners.
Administrative guidelines published in 2023 and not yet incorporated into French law would be taken into account, but not those published on June 17, 2024. The changes would notably concern the methods for determining the deduction based on substance, the rules for applying the domestic minimum top-up tax and the safe harbour regime relating to this tax. Clarifications would also be provided regarding the transitional safe harbour regime. The rules for apportioning the domestic minimum top-up tax in respect of constituent entities located in France belonging to the same group would also be modified.
