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France: Tax-Efficient Sectors

Oil & Gas Companies

Oil & gas companies exploiting reserves in France and abroad can deduct from taxable profits an accounting reserve fund into which they may transfer a sum equivalent to:

  • 23.5% of the value of sales generated by the company exploitation of oil and mineral reserves up to a maximum of 50% of the net profit generated by the company on such sales. The funds so transferred must be used within 2 years to finance the prospecting of new reserves or to improve production of oil and gas reserves already being worked in these countries. Assets purchased with the reserve fund cannot be set off against taxable profits a second time through depreciation unless the investments are made in France in which case 80% of the assets purchased can be set off against taxable profits through depreciation. The law is set out in Article 39 of the General Tax Code.



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