Company Law

The French Council of State posed limits on the tax consolidation of multinational companies

Conseil d’État, 9ème et 10ème sous-sections réunies, 15/04/2015, 368135, Inédit au recueil Lebon

The present case concerns taxation of multinational groups.

A French parent company had a subsidiary in Poland, which had a lower-tier subsidiary in Italy. These last companies made losses. Polish and Italian legislation did not allow them to impute their losses. As a consequence, the parent company, which was normally taxed in France, requested from French tax authorities to calculate its taxes by taking into account the losses made by the Polish and Italian subsidiaries. The French fiscal administration did not grant the request. The parent company’s request was also dismissed, in first instance, by the Administrative court of Montreil (Tribunal administratif de Montreil) and, in appeal, by the Administrative appeal court of Versailles (Cour administrative d’appel de Versailles).

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