Publication of the BOFiP regarding the special corporate income tax surcharge
Last Wednesday,administration published the BOFiP regarding the special levy enacted in the latest budget law, which applies to companies with revenue of 1 billion euros or more.
The provision specifies, with regard to taxpayers, that SIICs that have opted for corporate income tax exemption are subject to the contribution if they have a taxable segment (§60).
With regard to the determination of revenue (§80 et seq.), the BOFiP specifies in particular that:
“Excise taxes relate to the normal and routine conduct of the company’s business and must be included in the revenue used to determine the threshold for liability to the special tax on the profits of large corporations.”
“Grants received in the course of the company’s normal and ordinary business operations must be included in the revenue used to determine the threshold for liability to the contribution […]. This applies in particular to compensation for insufficient sales prices.”
Financial income does not need to be taken into account, except:
if“the regulations specific to certain sectors of activity so provide”
if they“should be viewed as one of the standard and normal ways in which the company pursues profit, a feature of its business model”
Extraordinary items do not need to be taken into account, which excludes capital gains from the sale of fixed assets unless they“are consistent with the company’s business model.”
If they are treated as disbursements, intercompany cost reimbursements are not taken into account, with the exception of opaque commission agents.
The application of a special tax regime (such as a 10% rate) or corporate income tax exemption does not affect the factors to be considered when determining revenue.
Only revenue related to profits subject to corporate income tax in France should be included
With regard to consolidated groups, the revenue of new subsidiaries that become part of the tax consolidation for the fiscal year must be included, while the revenue of subsidiaries that cease to be part of the group must not be included. The latter may, moreover, be required to make an advance payment of the contribution if they fall within its scope of application.
The BOFiP specifies that the tax base for the contribution is corporate income tax, including any amount related to the potential application of Article 209 B with respect to the results of a foreign entity (§240).
Since the special contribution is separate from corporate income tax, it does not reduce the net income used to calculate the employees’ profit-sharing under the statutory formula (§510).
This monitoring service is provided by Mispelon Avocat, a law firm specializing in tax audits and tax litigation. You can stay updated by subscribing to the newsletter via this link.