Deductible Interests

Interest rate on loans from affiliated entities

The french tax authorities published online 8 practical notes to clarifiy, with the use of concrete examples, how to justify of the interest rate applicable pursuant to article 212-I-a of the French tax code and to outline examples of good practices. These notes relate to:

  • the dialectic of the evidence;
  • the applicable means of proof;
  • comparability – publications of rating agencies and credit risk;
  • comparability – cases of adjustments that improve the reliability of a comparable;
  • comparability – existence of multiple and substantial differences;
  • comparability – multiple borrower bank loan agreement;
  • comparability – «mirror» loans;
  • comparability – bond capital market.