Régime mère-fille & clause anti-abus

Reminder on the anti-abuse clause

The anti-abuse clause then codified in Article 145, 6, k of the FTC (now set out in Article 205 A of the FTC) excludes from the parent company regime dividends received under a non-genuine arrangement, i.e. one put in place mainly to obtain a tax advantage that defeats the purpose of the parent-subsidiary regime and is not based on valid commercial reasons reflecting economic reality (FTC, Art. 119 ter, 3).

The facts

On 22 May 2014, Mr A... and his wife set up the non-trading company (Société Civile, SC) Crob, subject to corporate income tax (CIT).

Subsequently, Mr A..., who held 30% of the shares in SAS RT Développement, contributed full ownership of his shares in SAS RT Développement to SC Crob, for a value of €1,712,000.

From 2014 onwards, SAS RT Développement ceased all economic or commercial activity and was wound up voluntarily on 5 October 2018. SAS RT Développement was a holding company with three subsidiaries specialising in temporary work. On 12 November 2013, SAS RT Développement sold the shares in Franche-Comté Intérim BTP and Franche-Comté Intérim. During 2014, Franche-Comté Intérim Médical sold its business.

In 2016 and 2018, SC Crob received dividends from SAS RT Développement of €1,538,462 and €128,334 respectively, which it placed under the regime of Article 145 of the FTC – the parent-subsidiary regime.

On 28 October 2018, Mr A... gave the bare ownership of his shares in SC Crob to his children.

Following a tax audit covering the period from 1 January 2016 to 31 December 2018, the Tax Authorities challenged the exemption of the dividends paid by SAS RT Développement to SC Crob under Articles 216 and 145 of the FTC, i.e. the parent company regime.

SC Crob asked the Administrative Court (Tribunal Administratif, TA) of Besançon to discharge, in tax and penalties, the additional CIT assessed for 2016 and 2018.

The Besançon Administrative Court dismissed its claim and thus upheld the position of the Tax Authorities.

SC Crob appealed against the decision of the Besançon Administrative Court.

The decision of the Nancy Administrative Court of Appeal

The Nancy Administrative Court of Appeal (2nd chamber, 4 June 2026, No. 24NC02869) dismissed the appeal. Relying on all the preparatory work on the parent company tax regime, it pointed out that the legislature's objective was to encourage parent companies to become involved in the economic development of their subsidiaries, for the purposes of structuring and strengthening the French economy.

In the case at hand, however, SC Crob took no steps to resume or develop the business of SAS RT Développement, and the reinvestment in an unrelated forestry business is irrelevant.

The Nancy Administrative Court of Appeal concluded from all these factors that the creation and interposition of SC Crob had to be regarded as being driven by an essentially tax motive (deferral of capital gains tax under Article 150-0 B ter of the FTC, dividends exempt from CIT, early transfer of the SC Crob shares to the children under favourable tax conditions).

For the Nancy Administrative Court of Appeal, the wealth-management motive put forward by SC Crob does not meet the objectives of the parent-subsidiary regime.