France

Paul Hastings in collaboration with[Insert Name Here]
Liquidity Measures
Insurance Measures
Tax Reliefs
Other Reliefs

Liquidity Measures

Government guaranteed loans (Prêts Garantis par l’État)

Government Measure

Eligible businesses may apply for these loans in order to overcome their cash flow difficulties:

  • Duration: up to one year with a unilateral right of extension for the borrower within the limit of 5 years.
  • Amount: (i) up to 25% of the last available turnover of the borrower for a full financial year or (ii) two years of aggregate payroll for innovative companies1 or companies incorporated since 1 January 2019 (if more favorable).
  • French Government guarantees 70% to 90% of all loans (the percentage depends on the size of the company).

1A company is considered as “innovative” if (i) the company has received a public support for innovation (including Bpifrance individual aids and public supports listed in the Ministerial Order (click here);or (ii) the company has raised funds from French and foreign investors specialized in innovative companies (venture capital fund, private equity fund, etc.), or (iii) the company has been supported by an incubator.

Eligibility

All companies incorporated in France except for:

  • Civil Real-Estate Companies (except for civil real estate companies relating to sale and construction and national historic sites and civil real estate companies which their capital are entirely hold  by collective real estate investment (organisme de placement immobilier collectifs));
  • Credit Institutions;
  • Financing Companies.

See here for more information about eligibility.

Companies whose turnover exceeds €1.5b or have more than 5,000 employees and benefit from government guaranteed loans will not be able to pay a dividend or consummate share buyback transactions between 27 March 2020 and 31 December 2020 (in such case late payment interests are applicable).

Supervising Authority

Bpifrance

Minister of Economy and Finance

Availability

From 25 March 2020, up to 31 December 2020 (included)

Bpifrance Unsecured Loans

Government Measure

Unsecured loans (i.e., no guarantee/collateral required) aiming at making up businesses’ cash flow shortfalls.

Prêt Atout1 (national):

  • Duration: three to five years;
  • Amount: from €50k to €5m (€15m for the French ETI) depending on the business’ size);
  • Deferral of the reimbursement: up  to 12 months.

Prêt Rebond (terms and conditions depend on each regional policy):

  • Duration: seven 
  • Amount: from €10k to €300k;
  • Deferral of the reimbursement: two years.

1Following the success of the Prêt Atout, it is possible that it will no longer be available or will be limited.

Eligibility

Prêt Atout:

All very small companies (French TPE), SMB2 and moderate size companies (French ETI3) conducting a business activity for at least 12 months except for:

  • Civil Real-Estate Companies;
  • Financial Intermediation Institutions;
  • Real estate promotion and rental companies (entreprises de promotion et de locations immobilières);
  • Farm Companies with an annual turnover > €750k;
  • Distressed companies.

See here for more information about eligibility.

Prêt Rebond:

All SMB conducting a business activity for at least 12 months except for:

  • Civil Real-Estate Companies;
  • Financial Intermediation Institutions;
  • Real estate promotion and rental companies (entreprises de promotion et de locations immobilières);
  • Farm Companies with an annual turnover > €750k.

See here for more information about eligibility.

2A SMB (“Petite et Moyenne Entreprises”) is a French company which has: (i) fewer than 250 employees; and (ii) an annual turnover below €50m or an annual balance sheet below €43m.

3A ETI (“Entreprise de Taille Intermediaire”) is a French company which has: (i) fewer than 5,000  and (ii) an annual turnover below €1.5b or an annual balance sheet below €2b.

Supervising Authority

Bpifrance

Availability

From 2 March 2020

Bpifrance Loans Instalments Deferral

Government Measure

Automatic six-month instalment payment deferral for all existing loans granted by Bpifrance.

Eligibility

All companies which have taken out a Bpifrance loan prior to the COVID-19 epidemic.

Supervising Authority

Bpifrance

Availability

From 20 March 2020

Bpifrance Guarantee Schemes

Government Measure
  • Cash Flow Guarantee Scheme (i.e., in order to maintain the company’s overall financial structure).
  • Confirmed Credit Lines Scheme (i.e., short-term liquidity hardship).

Application on Bpifrance website.

Eligibility

Cash Flow Guarantee Scheme:

All very small businesses and SMB which meet one of the following requirements:

  • Being part of group comprising < 250 employees;
  • Workforce < 250 employees;
  • Annual turnover < €50m.

See here for more information.

Confirmed Credit Lines Scheme: all SMB and moderate size businesses except for distressed companies.

See here for more information.

Supervising Authority

Bpifrance

Availability

From 2 March 2020

Credit Mediation (renegotiation of credit lines)

Government Measure

Public support to renegotiate a rescheduling of bank loans. If the filing is complete:

  • financial institutions have 5 working days to review their positions;
  • If the difficulties persist, the mediator acting on behalf of the Bank of France intervenes to assist resolving points of contention; and
  • the mediator proposes a solution to the parties (directors, shareholders, creditors, etc.). Whilst the mediator’s proposition is not binding, parties must use best efforts to comply with the mediator’s recommendations.
Eligibility

All companies which, following negotiations with a bank or credit insurer, are unable to meet funding needs in the immediate term as a result of COVID-19 and/or suffering the aftermaths of a reduction in guarantees from a credit insurer.

May accept companies in amicable procedure, in safeguard or receivership, and exceptionally in compulsory liquidation.

See here for more information and application.

Supervising Authority

Bank of France

Availability

Until the end of the COVID-19 crisis.

Insurance Measures

Export guarantees and pre-financing

Government Measure

For SMBs and ETIs: coverage by Bpifrance Export Insurance of up to 90% of issued and declared export guarantee commitments or pre-financing (i.e., working capital requirement) (compared to 80% before).

For other companies: equivalent coverage up to 70%.

Purpose: lower cash mobilization in the implementation of export operations.

Eligibility

All companies

Supervising Authority

Bpifrance Export Insurance

Availability

Until the end of the COVID-19 crisis.

One year extension of the period covered by “prospecting insurance”

Government Measure

Purpose: avoid the failure of companies’ which have engaged any costs relating to prospection.

Eligibility

Companies which have taken out a Prospecting Insurance before the COVID-19 crisis.

Supervising Authority

Bpifrance Export Insurance

Availability

Until the end of the COVID-19 crisis.

Extension of the Cap France export reinsurance scheme for short-term export credits

Government Measure

Bpifrance Assurance Export will reinsure private insurers to support the credit insurance market on short - term export receivables (< 2 years).

Ceiling for government intervention: €2b.

Purpose for companies: maintain a credit insurance scheme to secure cash flows.

Eligibility

All companies involved in the Cap France export reinsurance scheme.

Scheme valid for exports in the EU Members states and OECD members.

Supervising Authority

Bpifrance Export Insurance

Availability

Until the end of the COVID-19 crisis.

Tax Reliefs

Staggered or Deferred Tax Deadlines

Government Measure

As regards payment deadlines, the deferral granted for a period of three months (and not later than 30 June 2020) without any penalty. No justification is required, except for the CIT balance (“solde”) due on 15 May 2020 which can be deferred only for companies with characterized financial distress.

As regards filing deadlines due on 5 May 2020 with respect to annual CIT return (“dépôt des liasses fiscales”), perimeter of tax group (“périmètre de l’intégration fiscale”) CVAE, and DAS2 forms, they are deferred until 30 June 2020.

Eligibility
Covered Taxes Excluded Taxes
  • Corporate Tax
  • Company value - added contribution (Cotisation sur la Valeur Ajoutée des Entreprises – CVAE);
  • Businesses’ Real Estate Contribution (Contribution Foncière des Entreprises – CFE);
  • Real-Estate Tax
  • VAT and similar taxes
  • Source Tax 
    (prélèvement à la source)
  • Special Tax on Insurance Contracts
    (Taxe spéciale sur les conventions d’assurance – TCAS)

Companies whose turnover exceeds €1.5b or have more than 5,000 employees and benefit from tax and social deferred deadlines for payments will not be able to pay a dividend or consummate share buyback transactions between 27 March 2020 and 31 December 2020 (in such case late payment interests are applicable).

Supervising Authority

French Treasury

To benefit from the deferral as regards payment deadlines, companies just have to fill an official form, without proceeding with any other formality.

Availability

Deferral period for:

  • payment  deadlines running from 15 March 2020 and
  • filing deadlines due on 5 May 2020.

Direct Taxes, Late Payment Interests, and Penalties Rebates

Eligibility

Supplementary mechanism: granted only for companies with characterized financial distress which they cannot overcome with a mere payment deferral. The French Treasury (i.e., the tax office “SIE”) has the discretion to rule on financial distress upon elements provided by taxpayers such as cash situation, turnover decrease, etc.

Supervising Authority

French Treasury

Application mandatory: required to fill the official form and to provide any document testifying the legitimacy of the request (individual procedure).

Availability

Deferral period for deadlines running from 15 March 2020 until 15 June 2020.

Deferral of limitation period for the French tax authorities (“report du délai de reprise”) and suspension of tax audits delays for the French tax authorities and the taxpayers (“suspension des délais prévus dans le cadre de la conduite des procédures de contrôle en matière fiscale).

Eligibility

All French tax payers.

Supervising Authority

French Treasury

Availability

Limitation period for the French tax authorities (“délai de reprise”) which was due on 31 December 2020 is due on 14 June 2021; and

Suspension of tax audits delays for the French tax authorities and the taxpayers (“suspension des délais prévus dans le cadre de la conduite des procédures de contrôle en matière fiscale”) until 23 August 2020.

Tax incentives for rental payment waiver

Government Measure

Applicable to real estate property owners who waive their right to perceive a rental payment (legal presumption of normality). Moreover, the measure allows them to deduct from their taxable basis all costs related to the real estate property (interests and additional expenses related to the rent), despite the lack of revenue collection.

In parallel, the tenant will have to register a taxable product which offsets the deductible expense that has already been registered (i.e., the rental payment which would have been paid).

Eligibility

Owners and tenant shall not be related entities (within the meaning of article 39,12 of the French tax code)

Taxpayers belonging to the following categories:

  • Land income  (revenus fonciers);
  • non commercial profits (bénéfices non-commerciaux); et
  • commercial profits (bénéfices commerciaux).
Supervising Authority

French Treasury

Availability

For rental payments due between 15 April 2020 and 31 December 2020

VAT reduced rate for sanitary equipment (masks, protective gowns, hydro-alcoholic solution)

Government Measure

A 5.5% rate is applicable on domestic supplies, intra-Community supplies and importations.

Eligibility

Transactions involving all French VAT taxpayers

Supervising Authority

French Treasury and French customs and indirect taxation authorities (DGDDI)

Availability

Until 31 December 2021

Suspension of limitation period for legal actions and judicial acts for tax disputes before administrative and civil courts

Eligibility

The suspension is applicable from 12 March 2020 to 23 June 2020. From this date, legal actions and judicial acts will be deemed done on time, if done within a two-month delay.

Supervising Authority

French Government

Availability

From 12 March 2020 to 23 June 2020.

Deferral of all or parts of both employee and employer URSSAF payment contributions

Government Measure

Amicable recall or amicable and forced collection actions have been suspended since 13 March 2020.

Eligibility

All businesses facing cash difficulties.

Companies whose turnover exceeds €1.5b or have more than 5,000 employees and benefit from tax and social deferred deadlines for payments will not be able to pay a dividend or consummate share buyback transactions between 27 March 2020 and 31 December 2020 (in such case late payment interests are applicable).

Supervising Authority

URSSAF

Application mandatory: required to declare and hand over the Social Nominal Reporting (Déclaration Sociale Nominative)

Availability

Deferral period for three months for deadlines running from 15 March 2020 until 15 June 2020 included.

Other Reliefs

Protection against eviction for non-payment of rent

Government Measure

No right of recourse for non-payment of rent under a business tenancy until 10 July 2020.

Eligibility

All business tenants in France

Supervising Authority

Ministry of Territories ‘Cohesion and Relations with Local Authorities’

Availability

Until 10 July 2020