FRANCE Law and Practice Contributed by: Anthony Roustan and Cédric Dubucq, Bruzzo Dubucq
3.6 Other Income France generally follows the provision of the OECD Model Convention. 4. OECD/G20 Global Tax Reform 4.1 Pillar One – Amount B As of early 2026, France has not yet enacted specific legislation to implement Amount B. The French tax authorities have issued preliminary guidance indicat - ing an intention to adopt the OECD’s standardised return approach for qualifying baseline marketing and distribution transactions. Implementation is expected through amendments to existing transfer pricing provisions and related admin - istrative guidance. No significant deviations from the OECD framework are anticipated, although France has expressed reservations about the scope of quali - fying transactions involving intangibles. 4.2 Pillar One – Amount A France has been among the strongest advocates for Amount A within the Inclusive Framework, pushing for reallocation of taxing rights towards market jurisdic - tions. France’s early adoption of a Digital Services Tax in 2019 was explicitly designed as an interim measure pending a multilateral agreement. As of early 2026, the Multilateral Convention on Amount A remains unsigned. France continues to apply its Digital Services Tax while signalling potential expansion if a global agreement is not finalised. The outcome remains closely tied to broader geopolitical negotiations. 4.3 Pillar Two France implemented Pillar Two through the Finance Act 2024, transposing the EU Minimum Tax Directive. The Income Inclusion Rule (IIR) applies from fiscal years beginning on or after 31 December 2023, and the Undertaxed Profits Rule (UTPR) from 31 Decem - ber 2024. The rules apply to multinational enterprise groups and large domestic groups with consolidated revenues of
at least EUR750 million. The minimum effective tax rate is set at 15% on a jurisdictional basis. 4.4 Specific Features or Deviations of Pillar Two Qualified Domestic Minimum Top-Up Tax France introduced a Qualified Domestic Minimum Top-Up Tax (QDMTT), meeting the OECD safe harbour standards. This ensures that any top-up tax on low- taxed French entities is collected domestically rather than by another jurisdiction. Treatment of the Research Tax Credit A key French feature concerns the Crédit d’Impôt Recherche (Research Tax Credit; CIR), which is clas - sified as a “qualified refundable tax credit” under the GloBE rules. It is therefore treated as income rather than a tax reduction, mitigating Pillar Two’s impact on effective tax rate computations for R&D-intensive groups. Transitional Provisions France has adopted transitional safe harbour provi - sions allowing reliance on country-by-country report data during initial implementation years, reducing the compliance burden during the transition period. 4.5 Digital Services Tax The French Digital Services Tax France was the first major European country to imple - ment a Digital Services Tax (Law No 2019-759), apply - ing a 3% tax on revenues from two categories of digi - tal activities: • targeted advertising services based on user data; and • digital intermediation platforms connecting users. The tax applies to companies with worldwide digi - tal revenues exceeding EUR750 million and French digital revenues exceeding EUR25 million. It was designed as temporary, pending Pillar One finalisa - tion, but remains in force given negotiation delays. Audiovisual Tax Additionally, the taxe video imposes a 5.15% levy on revenues from on-demand audiovisual media services distributed in France. This is earmarked for the Centre
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