Condition for membership in a tax consolidated group for the requirements of the Charasse amendment: strict evaluation of the appeals court judge in accordance with the law *

France - May 31 2012
In its Decision dated November 29, 2011 (First Chamber No. 10VE00784 - SA Otor), the Versailles Administrative Court of Appeals nullified the decision taken by the Montreuil Tribunal dated January 7, 2010 thus confirming the non-applicability of the mechanism of limiting the financial expenses provided for in the 7th paragraph of Article 233 B of the French tax code (CGI) to the sale made between members of a group of companies at the time of such sale, notwithstanding the potential restructuring likely to exclude the buyer or the seller from the tax consolidated group after such sale.

Capital gains of the assignment of equity securities between linked companies: a new tougher stance of the regime *

France - January 25 2012
To fight against optimisation schemes consisting in realising short term capital losses immediately deductible from the taxable result at the full statutory rate (33.1/3 %) by transferring equity securities within the same group, last year's 2011 Finance Act implemented a anti-abuse measure on this type of transaction by way of deferred taxation or deduction of such capital gains and losses (French Tax Code, art. 219 I a septies).

Co-authors: David Caupers.