PARIS: The French Amended Finance Act for 2014 allows French companies that are directly or indirectly held by the same non-French parent company established in the European Economic Area (EEA) (EEA Parent Company), without being held by the same French company (French Sister Companies), to be included in a tax consolidated group (Horizontal Tax Consolidated Group) in France.
This reform follows decisions by the EU Court of Justice and a French Administrative Court of Appeal pursuant to which the prohibition of Horizontal Tax Consolidated Groups as opposed to tax consolidated groups between a parent company and its direct or indirect subsidiaries that are all established in the same jurisdiction (Vertical Tax Consolidated Group) constitutes a restriction to the EU freedom of establishment. See EUCJ, n° C40/13, June 12, 2014, SCA Holding BV and others, and CAA Versailles, n° 12VE03684, December 2, 2014.
