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France: finance law 2017 — published

In a decision given on 29 December 2016 (No. 2016-744 DC ), the Constitutional Court ruled on the compatibility of certain provisions of the Finance Law 2017 (the law) with the constitution.

Of the most significant provisions of the law, only the following measures were ruled contrary to the constitution:

  • With regard to the diverted profits tax, the court noted that this tax could only apply upon a decision of the tax administration within the frame of a tax audit. In so far, as the law may not allow the tax administration to choose whether or not a company must be subject to tax, the court repealed all the provisions of article 78 of the law.
  • With regard to the immediate reporting of transactions exceeding €863,000, aimed at combating VAT fraud, the court ruled that the penalty introduced by the law in the case of a reporting failure, amounting to 1% of the portion of the price exceeding €863,000, was disproportionate. The court, therefore, repealed paragraph I of article 105 of the law.

The law was published in the Official Journal dated 30 December 2016 under Law No. 2016-1917 of 29 December 2016.

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