The arm’s length interest rates used in determining the deductibility of interest payments to shareholders for companies whose fiscal year ends between 30 June 2018 and 29 September 2018 has been published by France.

The portion of interest payments exceeding the following rates is generally not deductible unless documentation is provided demonstrating that the interest rate applied is at arm’s length. The period in which the fiscal year ends and the applicable rates are as follows:

  • Between 30 June 2018 and 30 July 2018 – 1.56%
  • Between 31 July 2018 and 30 August 2018 – 1.55%
  • Between 31 August 2018 and 29 September 2018 – 1.55%

The interest rates are determined by the Central Bank of France based on the average annual interest rates charged by financial institutions on medium-term variable rate loans of 2 years or more.