To determine the result of companies subject to corporate income tax, the provisions of Article 216 of the French GTC concerning the parent-subsidiary scheme, and those of Article 223 B of the same Code concerning the tax-consolidated group scheme, liken, under certain conditions, to investment income distributed between the members of a group (within the meaning of the provisions of Article 223 A of the GTC or Article 223 A bis of the GTC), that distributed by a company subject to a tax equivalent to corporate income tax in a Member State of the European Union or in another State party to the agreement on the European Economic Area having entered into an administrative assistance agreement with France with a view to combating fraud and tax evasion (a “European Company”). Thus, with regard to the investment income distributed by a company based outside of France, subject to the conditions set out, depending on the case, in Article 145 of the GTC and Article 216 of the GTC, or in the second paragraph of Article 223 B of the GTC:
- if this income gives entitlement to application of the parent-subsidiary scheme set out in Article 145 of the GTC and in Article 216 of the GTC, the rate of the share of costs and expenses which remains included within the result of the beneficiary company of the distribution is fixed at 1% of this income, including tax credit, either when it is collected by a member company of a group owing to a stake in a “European Company” which, if it was based in France, would fulfil the conditions to be member of this group pursuant to Article 223 A of the GTC or Article 223 A bis of the GTC (other than that of being subject to corporate income tax in France), or when it is collected by a company not a member of a group owing to a stake in a “European Company”, provided both companies have fulfilled the conditions to constitute a group if the second was based in France;
- if this income does not give entitlement to application of the parent-subsidiary scheme mentioned in point 1 of Article 145 of the GTC, the second paragraph of Article 223 B of the GTC provides deducting them from the result to the level of 99% of their amount, either when it is collected by a member company of a group owing to a stake in a “European Company” which, if it was based in France, would fulfil the conditions to be member of this group pursuant to Article 223 A of the GTC or Article 223 A bis of the GTC (other than that of being subject to corporate income tax in France), or when it is collected by a company not a member of a group owing to a stake in a “European Company”, provided both companies have fulfilled the conditions to constitute a group if the second was based in France.
In the event where the United Kingdom leaves the European Union and the Agreement on the European Economic Area, the conditions of application of these systems set out in Article 216 of the GTC and the second paragraph of Article 223 B of the GTC will no longer be fulfilled by “European Companies” based in the United Kingdom, solely owing to this event.
Nevertheless, it will be admitted that the income received owing to stakes in such companies shall be deemed to derive from companies based in the European Union until closure by the company beneficiary of the distribution of the financial year in progress at the time of withdrawal of the United Kingdom.
