On November 29, 2017, the French government approved a new corporate surtax that will be imposed on French companies with revenue in excess of one billion euros. The new surtax was enacted in an effort to reduce the French budget deficit caused by the recent repeal of the 3% tax on dividend distributions.
The surtax will be applicable for tax years ending on or after December 31, 2017 through December 30, 2018. Companies with gross revenues between one billion and three billion euros will be subject to a flat 15% surtax (an "exceptional contribution") and companies with gross revenue in excess of three billion euros will effectively be subject to a 30% surtax (an exceptional contribution plus an "additional contribution"). The non-deductible surtax will be assessed on the amount of corporate tax due, prior to any tax relief adjustments or tax credit offsets. For the purpose of determining whether the gross revenue thresholds have been met, the consolidated revenue of all members of a French consolidated group will be taken into account.