The draft amending budget for 2014 was passed at first reading by the French assembly on 9 December 2014. The legislation also has been passed by the Senate, and enactment is now expected before the end of 2014.
This second draft Finance Amendment Bill 2014 reflects the determination to reduce the deficit, with additional taxes to compensate for lower tax revenues and the slippage of certain government expenditure, including military or social spending. The second draft includes amendments regarding the corporate tax treatment of parent-subsidiary dividends and redemption by a company of its own shares. The Bill also includes amendments in respect of a tax on second homes and a the tax exemption for certain sporting events.
A dividend exemption would no longer apply under the French domestic rules concerning a parent and subsidiary if the related profits are deductible from the income tax base of the subsidiary paying the dividend; if the dividend is paid from profits of the distributing subsidiary that are not subjected to the French corporate income tax; or, in the case of a non-resident dividend-distributing company, subject to a similar tax.This rule is to apply to dividend distributions made for fiscal years that are open as of 1 January 2015.
