Newsletter April 2025

Shareholders’ current accounts: maximum deductible interest rates

Companies may pay interest on shareholders’ current accounts, which represent the funds made available to the company by its shareholders. These interests are deductible from the company’s taxable income, but this deduction is subject to a limit set by the tax authorities. This limit depends on the average interest rate applied by banks for variable-rate loans to businesses.​

For the first quarter of 2025, the average effective rate for variable-rate bank loans with a duration exceeding two years is 4.92%. This rate is used to determine the ceiling for deductible interest when companies pay interest to their shareholders on current accounts. In other words, the interest is deductible from taxable income up to this rate.​

Since February 2024, this rate is no longer calculated monthly but quarterly. Thus, if a company closes its fiscal year during a quarter, it can choose to use the rate of the current quarter or that of the previous quarter, depending on which is more favorable to maximize the tax deduction.​

For companies closing their fiscal year between January 31 and March 30, 2025, it is more advantageous to take the rate of the previous quarter, i.e., 5.37%, rather than that of the first quarter of 2025, which is 4.92%. By choosing the previous quarter’s rate, they can deduct a higher amount of interest.​

Thus, companies have the opportunity to make a strategic choice based on the applicable rate, which can allow them to achieve tax savings, particularly depending on the period of their fiscal year-end.

Digitalization of ruling requests for individuals

Since March 13, 2025, individuals have the opportunity to submit their advance tax ruling requests digitally, directly from their personal space on the impots.gouv.fr website. This measure aims to simplify the request process and make interaction with the tax administration faster and more accessible. The advance tax ruling allows a taxpayer to request an official interpretation from the tax administration on a specific tax issue, based on Article L.80 B of the Tax Procedures Book (LPF).​

The advance tax ruling is a procedure that offers the possibility of obtaining a clear and guaranteed response from the administration before making an important tax decision. It thus helps to avoid errors in the declaration or management of the taxpayer’s tax situation. This mechanism is particularly useful for individuals who want to be sure of how a tax rule applies to their situation.​

To make an advance tax ruling request, individuals must go to the impots.gouv.fr website and log into their personal space. Once connected, they will have access to a dedicated section where they can securely ask their question. After clearly formulating their request and providing the necessary information, they will submit the question to the tax administration.​

In return, the administration will send them an official response via their personal space, thus ensuring a correct interpretation of the applicable tax rules.​

The advance tax ruling presents many advantages, notably the possibility of obtaining an official response on often complex tax points. This allows taxpayers, including self-employed individuals, to secure their tax procedures and make informed decisions based on the tax administration’s interpretation.​

Thanks to the ability to submit requests online, the process becomes simpler and faster, thus offering a solution adapted to individuals’ needs.​

For example: Imagine an individual plans to rent out part of their primary residence via an online platform and wants to know if the income generated will be exempt from income tax. They can submit an advance tax ruling request to the administration by detailing their situation. The administration will then analyze their request and provide an official response indicating whether, in their specific case, the rental income will be exempt or taxable.​

A guarantee is provided to taxpayers: the administration’s response commits it not to challenge the interpretation or assessment made on the situation presented.

An overview of the social security financing law

The 2025 Social Security Financing Act, adopted on February 28, 2025, introduces several significant changes, particularly for micro-entrepreneurs and free share allocations.

• For micro-entrepreneurs (micro-BNC), the overall social contributions rate increases from 23.1% in the second half of 2024 to 24.6% in 2025.
• The Act also raises the employer contribution rate on free share allocations, from 20% to 30%.

Strengthening the anti-fraud measures for digital assets

Each year, all taxpayers must declare their foreign bank accounts. Penalties for failure to declare foreign-held digital asset portfolios have been tightened, with a surcharge that can reach up to 60%. A specific declaration form (No. 3916 or 3916 bis) must be completed and attached to the overall income tax return.

In addition, the 2025 Finance Act provides for stricter penalties for failure to declare capital gains from the sale of digital assets held as part of private wealth management. Such capital gains may be automatically taxed. A digital asset account refers to a storage location for intangible assets whose usage rights are tied to a person’s estate—this includes cryptocurrencies. Automatic taxation allows the tax administration to assess and levy taxes unilaterally, without the taxpayer’s agreement or prior declaration. This procedure applies if the taxpayer fails to meet their obligations and does not regularize their situation within 30 days after formal notice.

This risk should not be taken lightly, as the tax authorities now have increasingly sophisticated control tools. Furthermore, exchange platforms will be required to provide an annual report of user transactions for all operations carried out from January 1, 2026.

It’s important to remember that taxable capital gains exceeding €305 must be declared. Only transfers of crypto assets into fiat currencies are taxable. Exchanges between crypto assets are not subject to taxation. The taxpayer is subject to the 30% flat tax, with the option to opt for the progressive income tax scale.

Unlike other capital gains, disposals of digital assets do not benefit from any holding period allowance. Moreover, if the total disposals result in a capital loss, this cannot be carried forward to future fiscal years.

The capital gain is calculated as follows:

Selling price – (Total acquisition price × (Selling price / Total portfolio value))

The total amount of capital gain or loss must be reported in Annex Form No. 2086 of the income tax return.

Example:

A taxpayer bought 20 ETH at €500 each, i.e., €10,000 total, in March 2019. They later exchange 5 ETH for 1,000 XRP at €0.30 each. This transaction is fiscally neutral.

In June 2020, they sell the 1,000 XRP for €25,000. At this point, the portfolio consists of 15 ETH.

Acquisition cost of the portfolio: €10,000

Value of the portfolio at time of sale: €30,000 (15 ETH at €2,000 + €25,000 in XRP)

Capital gain:
€25,000 – (€10,000 × (€25,000 / €30,000)) = €16,666.67