Thin Capitalization: Recent Guidance from Tax Authorities

INTERNATIONAL TRANSFER PRICING JOURNAL - MAY/JUNE 2008
Criticized by practitioners, struck down by court as discriminatory and judged by the French tax authorities as having too narrow a scope of application, the thin capitalization rules under the French Tax Code were amended by the Finance Act for 2006. This article considers the 2007 Statement of Practice issued by the tax authorities in response to issues raised by the amended thin capitalization rules.