The present French Tax Update provides an overview of several significant publications issued between the end of 2016 and the first months of 2017, including: (i) guidance from the Conseil d'Etat with respect to the definition of a substantial interest under the French participation-exemption regime for capital gains; (ii) the decision of the European Court of Justice on the compliance with EU law of the prior-approval procedure applicable to cross-border reorganizations; (iii) the confirmation by a Lower Administrative Court that a sale and lease-back transaction challenged under the abuse of law theory by the French tax authorities was indeed abusive; (iv) the official guidelines published by the French tax authorities commenting on the limitation rules on foreign tax credits and the recent case law on the treatment of manufactured dividends; (v) an opinion issued by the Committee on Abuse of Law Matters regarding the tax planning of the financing structure of an international group; (vi) a new ruling of the European Court of Justice on the VAT recovery rights of mixed holding companies; and (vii) the publication of the forms to be used in connection with the French country-by-country reporting requirements.
