France: Tax Authority updates deductible interest rates for shareholder loans

The French tax authorities updated interest rates (BOI-BIC-CHG-50-50-30) on 28 January 2026, setting the maximum deductible interest for payments made by companies to shareholders, with quarterly and annual reference rates provided for 2025 and early 2026.

The French tax authorities have published updated interest rates (BOI-BIC-CHG-50-50-30), on 28 January 2026, that determine the deductibility of interest payments made by companies to their shareholders.

In accordance with the provisions of the first paragraph of point 3 of Article 39(1) of the French General Tax Code (CGI) and Article 212 of the CGI, interest paid to shareholders on sums they leave at, or make available to, the company in addition to their capital contributions is deductible, regardless of the company’s legal form, only up to a certain limit for the purpose of calculating taxable profit.

This limitation applies to all amounts left at or made available to the company by all shareholders (whether managers or not) and applies not only to companies subject to corporate income tax but also to those not subject to this tax, provided they carry out industrial or commercial activities.

The limitation also applies to companies operating in the money market.

Annual reference rates by fiscal year end

For twelve-month accounting periods ending within the first three months of 2026, companies may apply the following reference rates to cap the deductibility of interest paid to shareholders:

Quarterly average rates for 2025

The maximum deductible rates are calculated using quarterly average interest rates on variable-rate loans with an initial term of over two years, published by the Central Bank of France. The quarterly rates for 2025 were:

Calculation for non-standard accounting periods

Companies with fiscal years not coinciding with the calendar year calculate the annual cap using a weighted average of the relevant quarterly rates included in their accounting period. The same principle applies to periods shorter or longer than twelve months. For loans granted by parent companies to subsidiaries, the limitation under Article 39(1)(3) also applies.

Interest limits are assessed based on the gross interest amount for each shareholder account individually; excess interest on one account cannot offset a shortfall on another.

Earlier. Official Journal published the Q1 2025 average floating rate for bank loans with maturities over two years on 28 March 2025.