New Limitations on the Deduction of Financial Expenses Related to Acquisitions

With effect from 1 January 2012, the 4th Finance Amendment Law for 2011 introduced a new limitation on the deduction of financial expenses related to acquisitions of participation shares, which applies where the acquisition price of a company exceeds EUR 1 million and the purchasing company fails to demonstrate that there is an autonomous decision-making centre in France. This note describes the new provision and comments on its compatibility with EU law.