Answer ... A French parent company and its 95% owned French subsidiaries which are liable for corporate tax can opt for a tax consolidation tax regime to combine their profits and losses and pay corporate income tax on the consolidated result. A French parent company that indirectly owns at least 95% of its French affiliates through one or more foreign companies based in the European Union, Iceland, Norway or Liechtenstein (‘intermediate companies’) can also form a tax consolidated group. Similarly, it is possible to set up a tax group between sister companies with the parent company established in the European Union, Iceland, Norway or Liechtenstein.
This mechanism makes it possible to offset the tax profits and tax losses made by the various subsidiaries within the tax consolidated group, as well as to neutralise certain intra-group transactions.
The head of the tax consolidated group can pay corporate income tax for all companies within the scope of the group.