France

Briefings in English - 2009

In two recent cases, the French Supreme Administrative Tax Court (Conseil d’Etat) shed light on how it applies the new definition of ‘abuse of law’, especially in a context of transfer of tax credits. This briefing outlines the changes and highlights the details taxpayers should watch out for in structuring their transactions. (November 2009)

This guide provides a high-level outline of the tax treatment in relation to convertible bonds for issuers and investors in some of the key jurisdictions in which we practise tax. Among the points considered are the tax treatment of interest payments and the tax consequences of a conversion of the bond into shares or a cash redemption or settlement. Where relevant, we have included a summary of the expected accounting treatment under applicable local generally accepted accounting principles (GAAP), to facilitate the understanding of the tax treatment. (September 2009)

Class actions and third party funding have continued to be very topical over the last year, both at national and European levels. We therefore thought it would be helpful to provide an update to our previous publications on these subjects:

• Class actions and third party funding of litigation: an analysis across Europe, June 2007
and
• Recent developments in class actions and third party funding of litigation: a rapidly evolving landscape, February 2008.

The French government is contemplating introducing several adverse changes to the French tax statutes. They would primarily concern individuals but some broader changes may also affect corporations and financial institutions. The potential changes are still subject to internal discussions within the Ministry of Finance and there is no certainty that they will move forward. This briefing outlines the proposals and their potential implications for businesses. (August 2009)

This briefing sets out the key French tax issues regarding business restructurings and their tax treatment. It is important that companies examine whether their proposed restructuring will attract tax relief before taking action. Most business restructurings take the form of asset or share transactions that may or may not attract tax relief depending on the circumstances. Generally tax relief does apply to the transfer of shares and relief may also be claimable for the transfer of a business through merger, demerger or spin-off (in exchange for newly issued shares). In some situations using tax loss carry-forwards may be more attractive than claiming roll-over relief. (June 2009)

This briefing sets out the key French corporate income tax issues in respect of debt restructurings. In summary, debtors and creditors may be faced with material tax consequences in case of a debt waiver, debt transfer, conversion of debt into equity or debt buy-back, so that such operations may require an appropriate structuring in order to mitigate potential tax issues.

A recent court decision confirmed that transparent pre-pack sales can be used where they are in the best interests of the creditors as a whole. The court ruled that: the applicant must provide sufficient information on the pre-pack to enable the court to see that the procedure is not being obviously abused to the disadvantage of creditors; and the proposed administrator’s costs in putting together the pre-pack sale may potentially be treated as an expense of the administration. (June 2009)

This briefing summarises the typical tax subjects arising in downturn planning: avoiding unnecessary cash-outs in the form of tax payments; accelerating the refund of tax receivables; reducing taxable profits for tax year 2009 in combination with the carry-over of tax losses to other years; how to avoid losing deferred tax assets; how to mitigate the adverse effects of the termination or modification of a tax unity caused by a bankruptcy proceeding; what secondary liability risks may arise if counterparties are unable to pay their tax debts; tax aspects involved in restructurings; and some changes concerning business tax. (March 2009)

This guide covers the main legal and tax aspects. (December 2008)

On 15 February 2009 a reform of French insolvency law is due to come into force. Its main aim is to promote the use of the safeguard procedure (la procédure de sauvegarde), which was introduced on 1 January 2006. This briefing provides an overview of the key changes to be introduced by the reform and considers how it will affect the various players in French restructurings. (February 2009)

An overview of capital markets in France, 2008-2009. This was first published in the PLC Cross-border Capital Markets Handbook 2008/09 and is reproduced with the permission of the publisher, Practical Law Company.

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