French tax authorities issued final guidelines on 5 August 2014 for rules enacted earlier this year that limit interest deductions on loans between related parties. While the rules were initially targeted at hybrid instruments, under the guidance they can apply to any debt arrangement where the interest income is not taxed or taxed at low rates.
The final guidelines are similar to draft guidelines issued in April, and the rules apply for tax years ending on or after 25 September 2014.
The…