The present French Tax Update will first provide an overview of the most important amendments adopted by the French Parliament during the first review of the draft Finance Bill for 2017, with regards to free shares granted to employees, the rate and scope of the financial transactions tax and the decrease of the corporate income tax rate.

It will then focus on (i) two recent tax court decisions reviewing the specific facts and circumstances of management packages challenged as employment income by the French tax authorities, (ii) the confirmation by the Conseil d’Etat of its position on the VAT treatment of the contractual indemnity to be paid by the seller of a real estate asset should its purchaser not be able to rent such asset, (iii) a clarification by the Conseil d’Etat of certain operational issues attached to the abuse of law theory, and (iv) the constitutional ruling on the public registry of trust arrangement