2019 draft French budget includes ATAD and BEPS provisions


Tax e-Alert


The French government released the draft budget for fiscal year 2019 (‘the draft budget’) on September 24, 2018.

The draft budget notably includes corporate tax measures designed to transpose into French law Articles 4 and 6 of EU anti-tax-avoidance directive 2016/1164 dated July 12, 2016 (ATAD) with respect to interest limitation and general anti-abuse rules.  It also proposes to amend the French tax consolidation and participation exemption regimes and to reform the French patent box regime pursuant to the nexus approach of OECD BEPS Action 5. 

The French Parliament will now start to review, debate and amend the entire draft budget.  This legislative phase will last several weeks before they vote on and enact a final budget. Enactment typically happens at the end of December.

If enacted as proposed, most of the measures will apply for tax years beginning on or after January 1, 2019, and could affect multinational enterprises (MNEs) with French operations or subsidiaries.


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