What happened?

France’s government filed amendment I-3734 to Finance Bill 2027, No. 3210, on 10 October 2026. On verification on 15 October, the National Assembly marked it “En traitement”, subject to processing and admissibility. It is not adopted or enacted law.

Key details

The proposed Side-by-Side election would remove French top-up charges under the Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR) where the ultimate parent is in a qualifying jurisdiction. It would not remove France’s domestic top-up tax on low-taxed French entities.

Who is affected?

The separate ultimate-parent safe harbour is narrower: it concerns UTPR amounts attributable to low-taxed entities in the ultimate parent’s jurisdiction, including that parent. Neither election is a blanket exemption for every group with a French subsidiary.

Effective date / timing

If enacted as drafted, both new elections would apply to financial years beginning on or after 1 January 2026. The amendment also proposes extending transitional country-by-country reporting safe-harbour timing by one year. These proposed application dates are not evidence of current availability.

Why it matters

Eligibility depends on an OECD/G20 Inclusive Framework review of the relevant regime. For Side-by-Side treatment, the draft also provides for a qualifying-jurisdiction list set by ministerial order. Groups cannot establish eligibility merely by comparing headline tax rates.