Corporate tax

(Corporation tax, transfer pricing, business restructuring, VAT, tax consolidation)

When you are running your company, common questions also arise about whether a provision can be deducted for tax purposes, the deductibility of an expense in a contract for management fees or other complex transactions.

The tax basis of companies also impose regular questioning of whether the company has forgotten to invoice a company in the group for any sort of advantages obtained free of charge and more typically for asset transactions, the guarantee deposits provided or other operations carried out with no negotiation on the price since they are intra-group operations.

In so doing, these group operations may lead us to envisage together the construction of a tax consolidation scope, in order to limit the disadvantages just mentioned.

The complexity of your operations, or the fact that you are carrying out new ones, or are inventing new products will also lead you to wonder how to apply VAT and at what rate.

When your company grows, you may envisage agreements with partners which could be expressed as mergers, partial asset contributions, universal asset transfers and any other of consolidation or deconsolidation operation.

Lastly, if you intervene in several countries, you will necessarily have to fix the prices of the goods and services, or even of the financing, which takes place between all the entities of the group. These issues have important repercussions in terms of taxation and generically come under the designation of “transfer pricing”. Establishments in more than one country may also lead you to use exchange rate or interest rate hedging, the fiscal and accounting rules of which require a certain amount of solid legal analysis which we can provide you with.

Insurance, mutual insurance and non-profit organisations

(Tax on insurance treaties, Tax on surplus reserves (boni/mali), underwriting provisions, non-profit organisations)

 

The insurance sector is highly specific, and has the particularity of working in the opposite way from any other entrepreneurial project. Insurers begin by earning revenue from insurance premiums, the financial flows of which are invested and it is only later that they commit to the underwriting expenses constituted by the insured loss events.

 

These particularities are accompanied by very specific taxation rules, in particular with the tax on insurance treaties that affects insurance premiums, but also certain specific taxes such as the tax on surplus reserves and a whole series of tax measures that enable the calculation of the corporation tax basis, whether in the domain of financial or real estate investments or in the domain of the technical result emerging from premiums and losses.

Similarly, it is a sector undergoing transformation and following the mutual insurance companies in 1994, the mutual insurance companies governed by the Mutuality Code and the Providence institutes governed by the Social security code entered the tax system in 2012, with tax provisions enabling this transition to fiscal neutrality for unrealised gains.

These transformations are accompanied by concentrations in the sector, and presuppose mastery of the tax arrangements of restructuring and mergers, partial contributions of assets, as well as arrangements such as consolidation of accounts within a business combination scope.

 

As a player in the insurance sector, you can count on Towery to guide you through these highly specific tax arrangements.

Tax inspection and litigation

The tax inspection is a stage in the life of the company that most enterprises dread. The practical sequence of events, the procedures that fix the rules as well as the potentially very considerable consequences on the life of the company make a tax inspection a key moment to be skilfully negotiated each time it occurs.

The Towery team includes the expertise of a former tax inspector, whose professional experience within the tax authorities consisted precisely in conducting tax inspections in SMEs and mid-cap companies.

Thereupon, we are well familiar with the methods employed by the tax authorities, the rationale behind the procedures, both in terms of rules and in terms of unwritten usages, the better to advise you and provide you with the most effective defence.

We have the capacity to manage the inspection, right from the moment you receive the notification, or from the examination of the accounts, and throughout the process that may lead to arrears being due.

We shall also be at your side when continuing your defence in court, both in the first instance and in appeal, and for devising a strategy for the years following the inspection, and that could also be subject to an inspection on the same subjects.

Tax residence, regularisation of foreign assets

Executives like you are always on the move and sometimes may be from another country. It is therefore often necessary to precisely review your situation regarding your main residence, your business and family status, in order to assess whether your tax residence is coherent and even give you an idea of the freedom of movement you may have while remaining within the framework of your current or future tax residence.

This mobility may sometimes mean you have owned assets in a foreign country for many years, assets that today pose considerable problems, given the high increase in the penalties for having failed to declare their existence each year.

Lastly, it is sometimes also appropriate to advise you on the tax residence of your enterprises, and in particular of whether or not there is what is called in tax terms a “permanent establishment”, that is to say a branch office that should file a tax return abroad, or in France for the enterprises with head offices abroad.

Asset based taxation

(Disposal of securities, business assets for wealth tax, transfer/succession)

 

As a head of a business, your taxation is closely linked to that of your company. How your business evolves regularly affects your tax status, if only regarding the choice of your payment method (salaries/dividends…) but in particular in the case of a merger, the creation of a holding company, or other restructuring operation.

These legal operations have an impact on the securities you own, for they are often exchanged with others on the occasion of such operations. You may also be the holder of a management package to which the tax authorities shall be very attentive.

These securities that you hold are a source of business wealth that theoretically, the law exempts or mainly exempts for employees who are leaders. But the rules for obtaining these exemptions are demanding and sometimes contradictory with the structuring/restructuring operations you will be advised to carry out in the first instance in the interests of the company only.

Lastly, SMEs and mid-cap companies are often family run businesses, and it is always interesting to give thought on how to reduce the taxation regarding the transfer of control of the company, so that a system is in place and ready when the time comes.