EMEA Tax & Legal Insurance Newsflash
France
Case law
Full deductibility of foreign exchange losses on foreign dividends - CE 25-7-2025 n° 487722, Sté Établissement J. Soufflet
A French company recorded a foreign exchange loss on Czech dividends, resulting from the depreciation of the currency between the date of the distribution decision and the actual payment, and fully deducted this loss for tax purposes at the close of the financial year.
The Counsil of State held that the foreign exchange loss incurred upon payment of dividends from a foreign subsidiary is fully deductible from taxable income, even where such dividends benefit from the parent-subsidiary exemption regime. The decision specifies that the taxable event for dividends is the date of the general meeting deciding the distribution, and that any foreign exchange gain or loss arising between this date and the date of payment must be treated independently of the tax regime applicable to the dividend. This solution, which has general application, affirms the autonomy of the tax treatment of foreign exchange differences on dividends denominated in foreign currencies.
Finance Bill for 2026
The 2026 Finance Bill, introduced on October 14, is currently in its first reading at the National Assembly. The vote on the revenue section is scheduled for November 17, followed by the expenditure section. The Senate will review the text from late November to early December. If disagreements persist, a joint committee will seek a compromise, with the Assembly having the final say if needed. The goal is final adoption before December 23, then review by the Constitutional Council and promulgation by the President, with official publication expected between December 28 and 31, so the law takes effect on January 1, 2026.
Accelerated Elimination of the CVAE
The maximum rate of the Contribution on Business Value Added (CVAE) would be reduced to 0.19% in 2026, then to 0.09% in 2027, with full repeal in 2028—two years earlier than planned.
Exceptional Contribution on Large Corporate Profits
Extended for 2026, with reduced rates:
- 5% for companies with turnover between €1 billion and €3 billion
- 35,3% for companies with turnover exceeding €3 billion
Tax on Wealth-Holding Companies
A taxation of 20% on non-productive assets (luxury items such as yachts, jewelry, racehorses, etc.) held by wealth-holding companies controlled by individuals, where direct or indirect ownership by such individuals represents at least 50% of the share capital or voting rights.
Electronic invoicing
Article 28 of the 2026 Finance Bill includes new measures on the reform of electronic invoicing in France. The main points of the project are as follows:
- Replacing the term "partner e-invoicing platform" (PDP) with "approved platform" (PA)
- Abandoning the use of the public invoicing portal (PPF) for VAT-registered businesses
- Designating Chorus Pro as the platform for public entities for both receiving (B2G) and issuing (G2B) transactions
- Rewriting Article 290 concerning operations falling within the scope of e-reporting of transactions, which should be read carefully to map flows (for each VAT-registered entity)
- Expanding the scope of Article 290 A concerning e-reporting of payments (some cases were initially overlooked)
- Adding provisions regulating the conditions for changing Approved Platforms to maintain a minimum level of service during the transition, reflecting a concern for governance of interoperability and reversibility
- Adjusting penalties and creating a new penalty for failing to choose a Platform Approved for receiving invoices from September 1, 2026, the main objective is for all taxpayers to have made this choice as soon as the reform comes into effect
Most of these measures had already been announced by the tax authorities and are not surprising.
There remain some issues addressed in the simplification measures published in September 2025 that require decrees or ministerial orders, and are therefore not addressed in this Article 28.
Other measures under discussion include notably:
- Taxation of multinationals on profits, in proportion to the share of revenue generated in France.
- Adjustment of the tax on capital reductions.
- Introduction of a temporary contribution on dividends paid by large enterprises.
E-invoicing: Publication of External Specifications 3.1 and AFNOR Standards
The external specifications for the PPF (Directory and Data Concentrator) have been published on the impots.gouv.fr website. They also include the external specifications for ChorusPro for B2G.
The new version of the AFNOR standards relating to the electronic invoicing reform in France has also been published and includes:
- An update to the XP Z12-012 standard on formats and profiles, with changes to the EXTENDED profile to take into account the use cases studied by the Electronic Invoicing Commission, including the management of sub-lines and multi-vendor invoices, the addition of CPRO management rules for B2G invoices, and the addition of rules for managing readable representations and conversions between core formats.
- An update to the XP-Z12-014 standard on use cases, with some clarifications and new use cases (Joint Ventures, Barter Companies, invoices with offsetting between purchase and sale, management of sub-lines for subtotals or composite items, transparent intermediaries aggregating invoices for a single buyer (multi-vendor invoices), tax refund management).
- Version 1.1 of the XP-Z12-013 standard for APIs designed for exchanges between Compatible Solutions and Approved Platforms regarding consultation and updating of the PPF Directory and the exchange of invoice feeds, lifecycle statuses, and e-reporting (feed 10), following the release of the beta version last May and feedback from committee members.
These new versions are available on the AFNOR Edition website. They are the result of all the work carried out by the AFNOR Commission since last February (more than 60 working meetings with a large portion of our 250 members) and constitute the common foundation necessary for the implementation of the reform.
The next version is scheduled for the end of January 2026, primarily to clarify any points that need further clarification for better user adoption.
VAT – Focus on Assistance
Based on historic individual advance tax rulings (rescrits), many players in the assistance sector treated their activity as subject to VAT. The tax authorities have decided to withdraw these rulings, and by 2027 assistance activities are expected to fall entirely under insurance activity regime. We are awaiting further information on this from the tax authorities.
Caroline Chaize-Lang Partner T: +33 (0) 7 64 48 17 65 E: caroline.chaize-lang@avocats.pwc.com
Victor Calmette Director T: +33 (0) 6 67 60 63 21 E: victor.calmette@avocats.pwc.com
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