Purpose tests in anti-abuse or anti-avoidance provisions in France

31 July 2023 Publications

Written by Pierre-Henri Durand and Victor Camatta

Published on European Tax Blog

There are multiple purpose tests across different parts of the French corporate income tax legislation pursuant to which the French tax authority can challenge, recharacterise or disregard transactions or series of transactions. These range from general anti-abuse rules to regime-specific purpose tests, for instance in respect of safe harbours in the French controlled foreign companies or tax neutral merger regimes. The tests generally require a subjective condition (looking at the purpose of the transaction) to be met; a number require that an objective condition (looking at the purpose of the relevant law) is also fulfilled. Read more