France Administrative Court of Montreuil Issues Jurisprudence Letter Clarifying Taxation of Related Company Interest Payments

The French Administrative Court of Montreuil Dec. 16 issued Jurisprudence Letter No. 21, clarifying the taxation of interest payments between related companies, as discussed in Decision No. 2209892. The taxpayer, a French company that was part of a tax group, underwent an accounting audit, resulting in an increase to its corporate income tax liability. The tax authorities reinstated the interest paid during the relevant years by the taxpayer to the Luxembourg branch of a related company. The taxpayer challenged the tax authorities’ tax adjustment. Upon review, the Administrative Court found that: 1) the notional interest in question was an expense ...