10% contribution

In a recent Instruction, the French Tax Authorities have given some additional specifications regarding 10% contributions on corporate income tax (Instruction 4-L-1-95 on September 13, 1995):

- Scope of the contribution:

Liable companies are those who are subject to normal corporate income tax of 33.33% of reduced corporate income tax of 19%. Partnerships having not elected the corporate income tax are then not subject to this contribution. The companies which are subject to specific rates of corporate income tax (like charitable organization) are also not involved, as far as "G.I.E." (intercompany partnership).

- Input on profit-sharing plan:

As the contribution is a tax the nature of which is different from corporate income tax, it could not reduce the amount of the net tax income to retain for the imputation of the legal employee profit-sharing reserve.

Some other specifications were given by the French Tax Authorities regarding specific cases (tax consolidation, new companies, impact of restructuration on the contribution ...).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be brought about your specific circumstances. For additional information contact Claire Acard on 33/(1)/ or Lionel Benant on 33/ or enter text search: "ARCHIBALD ANDERSEN Profile". The members of ARCHIBALD ANDERSEN Association d'Avocats (S.G. Archibald and Arthur Andersen International) are registered with the Hauts-de-Seine Bar and the Lyon Bar.