French Tax Reform: On November 15, 2017, the French government released a proposed reform of the tax regime applicable to mergers and spin-offs. The draft legislation would remove some of the most stringent requirements currently applicable to both cross-border and domestic reorganizations.

Sullivan & Cromwell LLP - November 17, 2017

The proposed reform aims at making French tax law compliant with the EU Merger Directive, and is expected to be enacted by the end of the year. It would apply as from January 1, 2018.

The most important changes relate to (i) spin-offs/demergers, for which taxpayers would no longer be subject to a 3-year holding period following the reorganization, and (ii) cross-border reorganizations, for which taxpayers would no longer need to get a ruling from the French tax authorities in order to benefit from the tax deferral regime.