France Administrative Court of Appeal of Paris Clarifies Deductibility of Intra-Group Interest, Management Fees

The French Administrative Court of Appeal of Paris April 2 issued Decision No. 24PA04109, clarifying the deductibility of intra-group interest and management fees under corporate income tax rules. The taxpayer, a holding company, deducted interest on bond financing and annual management fees invoiced by its parent company. The tax authorities disallowed the deductions, holding that the taxpayer didn’t show that the interest rates were arm’s length and that the management fees reflected real, substantiated services. On appeal, the Administrative Court of Appeal of Paris found that: 1) the taxpayer didn’t prove that intra-group interest rates were arm’s length due to ...