What taxation should be applied to aid paid to companies in the context of the COVID-19 pandemic?

The French government’s decision on aid to companies under COVID 19

In order to face the health crisis of COVID-19, the French government has provided companies aids to overcome covid 19 and help them facing their difficulties.

The tax regime applicable to the aids paid within the framework of the coronavirus crisis to support the companies in difficulty (solidarity fund, fixed costs…) has been defined in the rectifying finance bill for 2021.

Indeed, the aid paid by the solidarity fund is exempt from corporate tax, income tax and all contributions and social contributions of legal or conventional origin.
All companies eligible for this aid benefit from the exemption, regardless of their legal form or the nature of their activity.

What should be reminded

This aid is not taken into account for the assessment of the turnover limits that condition the application of certain regimes, namely the micro-BIC, micro-BNC, etc. regimes.

The draft amending finance law for 2021 specifies that the tax and social neutrality that does not necessarily apply to other aid.

Thus, while aid allocated under the solidarity fund should continue to benefit from this exemption, emergency aid paid in addition to this fund by the State as of 2021 or for financial years ending since January 1, 2021 would be excluded.

Specifically, this exemption would not apply to:

Aid intended to compensate for fixed costs not covered by public revenue and aid;
Aid to ski lift operators;
Aid intended to take into account the impossibility of selling off seasonal stocks in certain businesses following a ban on public access;
Aid for the takeover of certain businesses.

This bill will soon be discussed in Parliament.

[ Art. 1, projet de loi de finances rectificative pour 2021, n° 4215, 2 juin 2021 ]