In the context of BEPS actions designed by the OCDE, and following the approval of the Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union, the French government has included in the Loi de Finances 2024 a new minimum tax for large multinational and large domestic groups, which will apply to fiscal years beginning from December 31st, 2023.

This additional tax, different from the corporate income tax, will be applicable to those groups of companies with a consolidated turnover exceeding 750 million euros for at least two years, within the four-year period preceding the tax year; and its tax rate has been set at 15%. In practice, a group of companies will be subject to this additional tax in the event the global taxation is below the minimum tax rate. The taxable base will be the same as that used to calculate the tax actually paid, and the applicable rate will be the difference between the minimum of 15% and effective tax rate applied. The collection of this tax can be made in two different ways:

  • The main rule establishes the income inclusion to the parent entity of a multinational group, who will be obliged to pay the additional tax when the tax paid by other entities of the group is lower than the minimum of 15%.
  • Alternatively, the Undertaxed Profit Rule provides for the reallocation of any residual amount of tax in cases where the entire amount of tax relating to low-taxed entities could not be collected by parent entities through the application of the above rule.

The entities affected by this new tax must submit an informative declaration, together with tax assessment, within 15 months of the year-end closing, or 18 months when the group first falls under the scope of the additional tax. Therefore, the first declarations will take place during the 2026 fiscal year, although its content still needs to be determined.

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