The French Ministry of Finance presented, during a press conference on 28 September 2016, the main tax provisions of what will be the draft Finance Bill for 2017, prior to the bill being submitted to the French Parliament.

Among the provisions that would affect the taxation of companies are the following proposals:

A progressive reduction of the corporate income tax rate: The standard corporate income tax rate (currently 33.33%) would be decreased to 28%.The new rate would be implemented progressively: (1) for financial years opened as from 1 January 2017, the 28% new rate would apply to the portion of the profits of small and medium enterprises up to €75,000; (2) for financial years opened as from 1 January 2018, the new rate would apply to the portion of profits up to €500,000 earned over a 12-month period; (3) for financial years opened as from 1 January 2019, the 28% rate would apply to all profits for companies with revenue (or revenue of a French tax group if such group exists) below €1 billion, and up to €500,000 of profits for companies with revenues in excess of €1 billion, in both cases for a 12-month period. The new rate would finally apply to all companies for the financial years opened as from 1 January 2020.

Non-renewal of the 10.7% surcharge on the corporate tax: The 10.7% surcharge on the corporate tax, paid by companies or French tax groups with revenues exceeding €250 million would no longer apply for the financial years closed as from 31 December 2016.

Instalments of corporate income tax payments due by large companies: Companies with revenues in excess of €250 million are required to remit and pay their corporate income tax in five instalments during the year. The amount of the fifth instalment currently is equal to the difference between 75% and 95% (depending on the amount of the company’s revenue) of the company’s estimated corporate tax liability for the current year and a number of instalments already paid. These percentages would be replaced by and increased by 80% to 98%, with the intention to accelerate the payment of the amount of corporate tax due by the largest companies.