Anti-abuse measure on indebtedness involving related parties

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On 25 September 2013, the French government released the key measures of the draft Finance Bill for 2014 that would have a notable impact on French companies. The provisions include an additional limitation on the deduction of interest paid on loans between related parties. If enacted, the new limitation will be applicable for financial years ending on or after 25 September 2013, which means this measure will have retroactive effect.

The deductibility of interest paid by French companies is already subject to several rules (thin capitalisation rules, the interest rate limit test and the interest barrier rule)…

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