The French tax authority has updated the interest rates used to determine the deductibility of interest payments to shareholders for companies with fiscal years ending between 31 March 2025  and 29 June 2025.

Interest payments that exceed these rates are generally not deductible unless companies can prove the rates are at arm’s length.

These rates are set by the Central Bank of France and are based on average annual interest rates charged by banks on medium-term variable-rate loans of two years or more.

Fiscal Year-End Period Interest Rate
31 March to 29 April 2025 5.49%
30 April to 30 May 2025 5.41%
31 May to 29 June 2025 5.32%

 

Earlier, France’s Official Journal published the Q1 2025 average floating rate for bank loans with maturities exceeding two years, set at 4.92% as of 28 March 2025.