France’s Official Journal published the Q1 2025 average floating rate for bank loans with maturities over two years, set at 4.92% on 28 March 2025.
This rate is used to determine the maximum deductible interest rate on loans from direct shareholders, as outlined in Article 39-1, 3° of the French Tax Code.
The applicable limit is based on the average of the four quarterly rates during a company’s fiscal year. If the lender qualifies as a related party under Article 39-12, an arm’s length rate under Article 212 may apply instead. In such cases, companies should retain evidence, such as a bank quote or a transfer pricing study, to justify interest rates above the published limit.
Companies with fiscal years ending between 31 March and 29 June 2025 should apply the following maximum deductible interest rates: 5.49% for fiscal years ending between 31 March and 29 April; 5.41% for those ending between 30 April and 30 May; and 5.32% for fiscal years ending between 31 May and 29 June.
Earlier, the Official Journal of France released the inaugural quarterly average floating rate for bank loans and credit facilities exceeding two years in maturity for 2024 on 28 March 2024. This rate is utilized in determining the yearly maximum interest rate on loans from direct shareholders, with the average floating rate established at 5.97% for the initial quarter of 2024.
