An amendment adopted against the grain. Against all expectations, the National Assembly has adopted an amendment put forward by the La France Insoumise group, introducing a tax on the global profits of multinationals at an effective rate of 25%.
This measure, introduced in article 209, XI of the General Tax Code, was voted through despite the unfavorable opinion of the Government and the General Rapporteur - and is already shaking the foundations of international tax law.
By breaking with the tax treaties signed by France and with the OECD's multilateral consensus on Pillar II (minimum worldwide rate of 15%), France would be isolating itself fiscally, at the risk of ushering in an era of unprecedented litigation and double taxation.
An amendment outside conventional limits
Under the voted mechanism, French companies would be taxed on their worldwide profits, broken down according to a "French sales/world sales" ratio. The portion thus attributed to France would then be taxed at 25%.
The intention is clear: to tackle aggressive tax optimization, estimated by the amendment's authors at between 80 and 100 billion euros a year, notably through transfer pricing.
But the system runs up against two cardinal principles:
- Bilateral tax treaties: these allocate taxing powers according to the location of activities, and prohibit double taxation. Under Article 55 of the French Constitution, these treaties take precedence over domestic law; failure to comply with them would expose the State to massive repayments.
- The OECD/EU consensus: the Pillar 2 Directive (2022/2523) imposes a minimum rate of 15%, the fruit of a worldwide agreement painstakingly reached between 140 countries. Unilateral taxation at 25% upsets this fragile balance and exposes France to economic reprisals or company migration to "conventional" jurisdictions.
Between political voluntarism and legal isolation
This is not the first time that France has shown its determination to go further than its partners in terms of tax justice.
But in this case, the step taken is unprecedented: we are moving from a logic of international cooperation to one of punitive sovereignty.
The General Rapporteur himself warned of the mechanical double taxation that would result from the system: the same fraction of profit could be taxed both in the country of origin and in France, in the absence of an elimination agreement.
As for the Minister of the Economy, he summed up the situation with a lapidary formula: "This text will not bring in 20 billion euros, but 20 billion in trouble".
The fragile balance of Pillar II under threat
For the record, OECD Pillar II is based on a minimum effective tax rate of 15% for groups with consolidated sales in excess of €750 million.The aim is to put an end to the global race to lower rates and ensure consistent minimum taxation.
By setting a unilateral floor rate of 25%, France would expose itself not only to investment withdrawals, but also to constitutional invalidation.Indeed, the measure directly contradicts the hierarchy of norms: a tax law cannot set aside the stipulations of a duly ratified treaty.
Critical analysis: a symbol of fiscal malaise
Behind this initiative lies the whole debate on the legitimacy of international taxation: between perceived injustice and respect for multilateral commitments.
Political voluntarism cannot ignore the arm's length principle, the cornerstone of contractual and transfer pricing law.
In the absence of a coordinated overhaul, France's unilateralism risks weakening the country's credibility on the international stage and fuelling a new tax arbitration dispute.
Our reading
This "surprise" adoption illustrates a recurring phenomenon: the temptation to use tax law as a political lever, even if it means ignoring the constraints of international law.The quest for tax justice is no substitute for legal consistency, and it is in this area that the measure is most fragile.
To be continued, then, between the parliamentary shuttle and review by the Constitutional Council.But one thing is certain: the clash of doctrines between fiscal sovereignty and OECD consensus has reached a new level.
