Business tax lawyer in Paris: corporate tax, groups and restructurings.

A tax lawyer advises on the determination of taxable profit and on the transactions that alter it. The profit subject to corporate income tax is determined under the rules of Articles 38 and 209 of the General Tax Code, then adjusted by provisions specific to groups, interest, losses and restructurings. In a group, the lawyer examines the shareholdings that condition tax consolidation or the parent-subsidiary regime, as well as the cash-pooling agreements and the rates applied between companies. For a merger, a partial asset contribution or the sale of a subsidiary, the lawyer checks the conditions of the special regime and drafts the undertakings that the deed must contain. In the event of an audit, the lawyer replies to the reassessment proposal and argues the burden of proof. The Court of Cassation recalls the extent of this role: "Bound by a duty of advice and caution, the lawyer must draw the client's attention to the uncertainties of the law as it stands on the day of the intervention and to the risks that may affect the validity or effectiveness of the planned transaction" (our translation) (Cass. 1re civ., 25 June 2025, No. 23-16.629, published in the Bulletin). In that case, the fault of an adviser who had concluded categorically that a share contribution transaction carried no risk was upheld; the cassation concerned only the assessment of the loss. For each transaction, the firm therefore flags the uncertain points and what can be secured in writing.

The standard rate of corporate income tax is set at 25% by Article 219, I, of the General Tax Code, in the version in force since 21 February 2026. A reduced rate of 15% applies up to €42,500 of taxable profit per twelve-month period, for taxpayers whose turnover does not exceed 10 million euros in the financial year, reduced where applicable to twelve months. The capital must be fully paid up and held continuously, as to at least 75%, by individuals, or by a company meeting the same conditions whose capital is itself held as to at least 75% by individuals. For the parent company of a tax consolidation group, turnover is assessed by adding together that of each member company, which can mean losing the reduced rate once a subsidiary joins. Net long-term capital gains on equity investments are taxed at 0%, but a share of costs and charges equal to 12% of the gross amount of the capital gains on disposal is added back to taxable income. Whether shares qualify as equity investments depends on how they are recorded in the accounts and, for certain shares, on a holding of at least 5% of the voting rights. The firm checks these conditions against the version of the text applicable to the financial year concerned.

Article 223 A of the General Tax Code allows a parent company to make itself solely liable for the corporate income tax due on all the results of the group formed by itself and the companies in which it holds at least 95% of the capital, continuously throughout the financial year, directly or indirectly. The overall result is the algebraic sum of the results of each company, determined under standard conditions (Article 223 B). The Court of Cassation states that "by tax consolidation under the conditions it lays down, the parent company makes itself solely liable for the corporate income tax due on all the results of the group" (our translation) (Cass. com., 18 May 2022, No. 20-21.852). In that case, a consolidated subsidiary had made a profitable disposal while its parent was in safeguard proceedings. The Court held that, where the financial year closes after the opening judgment, "payment of corporate income tax is, for the companies subject to it, a legal obligation inherent in the activity continued after the opening judgment" (our translation) (same judgment, published in the Bulletin). It quashed the judgment that had refused preferential treatment to the Treasury's claim: the decision is unfavourable to the parent, which bears the tax arising from its subsidiary's result. The consolidation agreement must therefore provide for each subsidiary's contribution to that tax.

The General Tax Code designates the parent as the sole taxpayer; how the burden is shared between the companies is a matter for their agreement. Most often, each subsidiary pays the parent the tax it would have paid had it been taxed separately. This contractual neutrality has lasting effects. In a dispute decided in 2026, a subsidiary that had been sold claimed from its former parent 705,413 euros paid in respect of the 3% contribution on distributions, later declared contrary to the Constitution. The Paris Court of Appeal held that this declaration "does not in itself retroactively entail the nullity or lapse of the Consolidation Agreement" (our translation) (CA Paris, pôle 5 ch. 8, 5 May 2026, No. 23/05406). It added that the principle of tax neutrality, "which aims to balance taxation, concerns only the relations between the taxpayer and the tax authorities" (our translation) (same judgment). The subsidiary's claim was dismissed: the decision is unfavourable to it. The court noted that the exit agreement contained no indication of what would happen to payments made before the sale, and applied it as written: what had not been stipulated was not refunded. A useful agreement therefore specifies how each subsidiary's contribution is calculated, the treatment of tax relief and of provisions struck down, the allocation of reassessments and the consequences of leaving the group.

Leaving has both tax and contractual effects. For tax purposes, losses suffered by a company before it joined the group can be set only against its own profit, and net financial expenses not deducted before entry become usable again after exit (Article 223 I of the General Tax Code). Neutralisations made during consolidation can also continue to have effect. The Council of State held that, where the group is dissolved before a neutralised provision on shares is reversed, the part not reversed is not deducted from the last overall result, absent an express provision; it dismissed the company's appeal, a result unfavourable to it (CE, 9 June 2022, No. 445023, Vivalto Santé). Contractually, the exit agreement governs earlier reassessments. The Paris Court of Appeal applied an agreement that placed on the departing subsidiary increases in tax notified before the sale, noting that "it is not for the insolvency judge to find the nullity of a tax consolidation exit agreement whose nullity has never been declared by another court" (our translation) (CA Paris, pôle 5 ch. 9, 16 June 2022, No. 21/09573). It nevertheless limited the parent's claim to the amount justified, namely 16,871 euros. The exit should therefore be prepared at the same time as the sale.

Interest paid to shareholders is deductible up to a rate equal to the annual average of the average effective rates charged by credit institutions and finance companies for floating-rate loans to businesses with an initial term of more than two years, provided the capital is fully paid up (3° of 1 of Article 39 of the General Tax Code). Article 212, I, a extends this limit to sums made available by an associated or related company, and allows a higher rate to be deducted if the borrower shows it would have obtained it from independent financial institutions under similar conditions. The reference to associated but unrelated companies results from Article 14 of the Finance Act for 2026; according to the administrative guidelines, it applies to financial years closed from 31 December 2025 (BOI-IS-BASE-35-20, updated 15 July 2026). Proving the market rate is demanding. The Council of State holds that this rate is assessed by reference to the characteristics of the loans and the borrower's own situation, not that of the group, and that the proof cannot be made if such a loan would not have been possible (CE, 18 March 2019, No. 411189). The company, whose assets had been pledged to the group's bank, lost. The firm therefore builds the justification of the rate at the time of the loan.

For a company that is not a member of a tax consolidation group, Article 212 bis of the General Tax Code in principle limits the deduction of net financial expenses to the higher of two amounts: three million euros, reduced to twelve months if the financial year has a different length, or 30% of adjusted taxable income. That income is obtained by adding back in particular the net financial expenses, the depreciation allowed as a deduction net of taxable reversals and of the adjustments provided for by the text, and provisions for impairment net of their taxable reversals, before the set-off of losses. The same article provides for additional deductions of 75% in certain situations and a specific cap in the event of thin capitalisation, where the sums made available by related companies exceed one and a half times equity. Net financial expenses are the excess of deductible financial expenses, after applying Article 212, over taxable financial income. The review therefore has two stages: first the rate of each interest charge, then the overall cap. The definition of the expenses covered has changed. Under the former wording, the Council of State held that interest paid and received under an interest-rate swap did not remunerate sums made available and fell outside the calculation; it dismissed the minister's appeal (CE, 4 November 2020, No. 438629). The current text expressly covers interest paid under derivatives or hedging contracts relating to the company's borrowings. For a tax consolidation group, a separate mechanism applies, to which Article 223 I refers. The firm redoes the calculation on the version in force for each financial year.

Taxable profit excludes transactions that, by reason of their purpose or terms, fall outside normal management. The Council of State defines an abnormal act of management as an act by which a company decides to impoverish itself for purposes unrelated to its own interest (CE, 21 December 2018, No. 402006, Croë Suisse, published in the Lebon collection). The tax authorities do not rule on the merits of management choices. For the sale of a fixed asset, they discharge the burden of proving abnormality when they establish a price significantly below market value and the taxpayer produces nothing to the contrary; the company must then show that the impoverishment was decided in its own interest, out of necessity or in exchange for consideration. In that case, the Council of State set aside the judgment that had refused to take account of the illiquidity of the shares sold: the decision is favourable to the company. The situations targeted within groups are common: an advance to a subsidiary bearing no interest, an intragroup transfer price, bearing another company's expenses, the remuneration of services. The defence rests on documents drawn up at the time of the act: valuation, expected consideration, commercial or financial interest, a reasoned corporate decision. The firm checks these elements before the transaction and, in an audit, challenges the value adopted by the tax authorities.

The principle is now restrictive. Point 13 of Article 39 of the General Tax Code excludes from deductible expenses support of any kind granted to another company, except support of a commercial nature. This exclusion does not apply to support granted under a conciliation agreement that has been recorded or approved by the court, or to support granted to a company in safeguard proceedings, judicial reorganisation or judicial liquidation. The latter, where not of a commercial nature, is deductible up to the negative net equity of the company supported and, beyond that, in proportion to the interests held by other persons. For financial years before that text, the Council of State held that financial support granted by a company to its subsidiary in its own interest could be deducted, and that the company could prove, by means of economic valuations, that the value of its holding had not increased (CE, 21 June 2022, No. 447084, Ixcore, published in the Lebon collection). Under the wording of Article 223 B applicable to financial years closed between 2005 and 2007, it also held that the absence of the statement of debt waivers and subsidies did not in itself prevent their neutralisation in the consolidated group; this result, specific to the former neutralisation regime, does not apply to support granted today. The contrary judgment was set aside: the decision is favourable to the company. The firm therefore characterises the support, its date and the subsidiary's situation before it is granted.

Yes, subject to conditions. Under Article 210 A of the General Tax Code, net capital gains and profits arising on the assets contributed by reason of a merger are not subject to corporate income tax. This regime is conditional on undertakings that the absorbing company must give in the merger agreement: taking over certain provisions and reserves, calculating future capital gains on the tax value of non-depreciable fixed assets and adding back the capital gains on depreciable assets over five or fifteen years. The technical merger deficit recorded as an asset gives rise to no later deduction. Article 210 B applies this regime to the partial contribution of one or more complete branches of activity, and treats certain contributions of shareholdings as a complete branch, in particular those relating to more than 50% of the capital. The consequences are not only tax-related. Under the Commercial Code provisions then applicable, where the contribution was placed under the legal regime of demergers, the contributing company and the recipient became, unless otherwise stipulated, jointly liable for the taxes of the contributed branch whose triggering event pre-dated the transaction; the Council of State inferred that the recipient could challenge those taxes, within the limit of the sums due under that joint liability, and dismissed the minister's appeal (CE, 9 October 2019, No. 414122). The firm checks the definition of the branch, the undertakings in the agreement and the allocation of the tax liability.

They can be. In principle, a year's loss is carried forward to later years and deducted up to one million euros plus 50% of the profit exceeding that amount (Article 209, I, of the General Tax Code). In a merger or contribution placed under the regime of Article 210 A, the transfer of the losses of the absorbed or contributing company in principle requires approval. It is granted if the transaction is economically justified and has principal motives other than tax, if the activity that gave rise to the losses has not changed significantly during the period in which they arose, if it is continued for at least three years without significant change, and if the losses do not result from the management of movable or real estate assets (Article 209, II, 1). For a merger, approval is not required where the cumulative amount transferred is below €200,000, subject to the other conditions of the text; this exemption does not apply to demergers and partial contributions of complete branches of activity (Article 209, II, 2). A change in a company's corporate purpose or real activity amounts to cessation of the business; a change of real activity means in particular the addition of an activity causing an increase of more than 50%, or the abandonment or transfer of an activity causing a decrease of more than 50%, in either turnover, or average headcount and gross fixed assets, in the financial year of the transaction or the next compared with the year before it, unless approval is granted in the cases provided for by the text (Article 221, 5). The Council of State drew an unfavourable consequence: a company that had sold its business and changed its purpose could not carry back the loss of the following year, not being the same company; its appeal was dismissed (CE, 23 December 2025, No. 500342, Immofaq). The carry-back is set against the undistributed part of the previous year's profit, excluding exempt profits or profits on which tax was paid by means of tax credits or reductions, up to the lower of the profit declared and one million euros (Article 220 quinquies).

The tax authorities' right of reassessment is in principle exercisable until the end of the third year following the year for which the tax is due (Article L. 169 of the Tax Procedure Code). Losses carried forward partly escape this limit. The Council of State holds that the tax authorities may check the existence and amount of losses arising in years that are themselves time-barred, where the company sets them against the year under audit or states that it has them at its year-end (CE, 14 November 2025, No. 493824, Faun Environnement, published in the Lebon collection). Losses are set off in chronological order, starting with the oldest. A loss treated as entirely set against the profits of time-barred years can no longer be corrected; if it was set off only in part, the tax authorities can act only up to the remainder. The administrative court of appeal had treated the stock of losses as an undifferentiated whole; the Council of State set aside its judgment, a result favourable to the company. In practice, a tracking table of losses, year by year, with their set-off, makes it possible to delimit what the auditor can still challenge. This table must also take account of the set-off cap applicable since 2011, which carries part of the loss forward to later years. The firm reconstructs this chronology before replying to a reassessment concerning old losses.

Yes. Article L. 64 of the Tax Procedure Code allows the tax authorities to disregard sham transactions and those that, seeking a literal application of the texts against the objectives of their authors, could have been inspired by no motive other than avoiding or reducing tax. Article L. 64 A covers, subject to Article 205 A of the General Tax Code, acts that seek the benefit of a literal application of the texts against the objectives of their authors and whose principal motive is to avoid or reduce tax. For corporate income tax, Article 205 A disregards non-genuine arrangements put in place to obtain, as a main purpose or one of the main purposes, a tax advantage contrary to the object or purpose of the applicable law. In both cases, the dispute may be referred to the tax abuse of rights committee. Abuse of rights within the meaning of Article L. 64 entails a surcharge of 80%, reduced to 40% where it is not established that the taxpayer was the principal initiator of the acts or their principal beneficiary (Article 1729 of the General Tax Code). The risk concerns in particular mergers designed to use losses, the interposition of holding companies and contributions followed by sales. The Court of Cassation upheld the fault of an adviser who had concluded categorically that a share contribution transaction carried no risk, while recalling that no loss "can arise from payment of the tax that a taxpayer is legally bound to pay and that compensation linked to a tax reassessment is limited to the surcharges and penalties it entailed" (our translation) (Cass. 1re civ., 25 June 2025, No. 23-16.629), unless it is proved that accurate advice would have led to a lower tax. The firm therefore documents the economic reasons for the transaction before it is carried out.

It is possible, but the tax itself is rarely recovered. As regards the chartered accountant, the Court of Cassation holds that "payment of the tax charged to a taxpayer following a tax reassessment is not compensable damage, unless it is established that, duly informed or duly advised, the taxpayer would not have been exposed to payment of the tax reassessed or would have paid a lower tax" (our translation) (Cass. com., 28 May 2026, No. 25-11.366). It quashed the judgment that had held the professional liable without examining whether the liability compensated included the tax; this decision therefore limits the compensation sought by the liquidator. Surcharges, late-payment interest and the costs of the proceedings remain the heads of loss most often disputed. Against the seller of the shares, the route is the liability warranty. In a case where the buyer claimed under the warranty the cost of working hours to be recovered, the court of appeal had held the claim inadmissible for want of any challenge to the accounts within the contractual period. The clause covered any new liability originating before the reference accounts and tax reassessments based on earlier accounting errors; the Court of Cassation set aside the judgment for distortion, noting the terms of the clause, "from which it follows that accounting errors prior to the date of the reference accounts could be taken into account under the liability warranty" (our translation) (Cass. com., 11 February 2026, No. 24-18.870). The decision, made on the interpretation of the clause and not on a tax reassessment, is favourable to the buyer. The firm therefore reviews the clause, its notification periods and its caps as soon as the reassessment proposal is received, before the contractual period expires.