On Tuesday 8 November, the Code of Conduct group of the Council, which is responsible for matters relating to corporate taxation, officially notified the European finance ministers of France's refusal to make changes to its system of tax credit for research, known as a 'patent box' (tax regime favourable to patents and intellectual property), to come into line with the overall approach of the OECD.
In 2014, the Code of Conduct group agreed to change these regimes to comply with the OECD standard ('modified nexus approach'), which aims to link the real economic activity to the tax advantage. France argues that its system, with a tax rate of 15%, is frankly unappealing to anyone wishing to engage in aggressive tax optimisation.
"The Code of Conduct group states that tax measures which provide for a significantly lower effective level of taxation (...) than those levels which generally apply in the member state in question are to be regarded as potentially harmful (...). The French IP regime tax rate is significantly lower than the general tax rate in France (33.3%)", the report submitted to the ministers reads. (Original version in French by Élodie Lamer)