The French Supreme Administrative Court (Conseil d’Etat) on 29 June 2020 rendered its decision in the Bernys case, which deals with the non-deductibility of payments to persons established in a low-tax jurisdiction.
Pursuant to Art. 238A of the French Tax Code (CGI), interest, royalties and service fees paid to persons established in a low-tax jurisdiction are not deductible for French corporate tax purposes and are recharacterized as a constructive distribution, unless the payer substantiat…