Supreme Court decisions of March 1st, 2017
French companies should take precautionary action now in order to claim the French CVAE (Cotisation sur la valeur ajoutée des entreprises) paid in 2016.
In CVAE matters, companies paid the tax on the effective tax rate.
The turnover to be used for calculating the effective tax rate for companies’ members of a tax consolidated group is assessed at the level of the group. In a nutshell, it corresponds to the sum of all the companies’ turnovers of the tax consolidated group.
But when the companies are not members of a tax consolidated group, the turnover is assessed at the level of each individual company which creates a difference in treatment to the detriment of companies members of a tax consolidated group.
The Supreme Court referred a constitutional question to the French Constitutional Court based on the conformity to the constitutional principles of the difference in treatment for companies who are members of a tax consolidated group and whose turnover does not exceed €50 million – Conseil d’Etat, 1st mars 2017, n ° 406424.
The French Constitutional Court has now 3 months to render its decision.