Recently, France has published interest rates for entities whose financial year ended between 30 June 2019 and 29 September 2019 , which are used to determine the deductibility of interest payments to shareholders. 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:
Rates for the period from 30 June 2019 to 29 September 2019 are:
- Between 30 June 2019 and 30 July 2019 – 1.38%;
- Between 31 July 2019 and 30 August 2019 – 1.37%; and
- Between 31 August 2019 and 29 September 2019 – 1.36%.
The interest rates are fixed by the French central bank on the basis of the average annual interest rates of the financial institutions for medium-term variable rate loans with a term of at least 2 years.
