International business

What is tax planning?

Tax planning consists of organising a company's operations so as to minimise taxes while strictly complying with the applicable legislation. The aim is not to evade tax, but to identify lawful opportunities to reduce the tax burden, optimise financial flows and support the company's growth.

It is distinct from aggressive tax optimisation and artificial arrangements, which tax authorities actively combat through anti-abuse rules and reassessment procedures.

The line between legitimate planning and abusive arrangements is defined by law. The French Tax Procedure Code (LPF) allows the tax authorities to disregard, as unenforceable against them, acts constituting an abuse of law: fictitious acts, or acts pursuing an exclusively tax-driven purpose. Since 2020, the LPF has extended this mechanism to arrangements whose purpose is mainly (and no longer exclusively) tax-driven. Command of these two anti-abuse rules, and of the Conseil d'État case law interpreting them, is the foundation of any durable tax strategy.

What is at stake in tax planning

Taxation has a direct bearing on a company's profitability and competitiveness. A poorly designed tax strategy can generate additional costs, expose the company to penalties and complicate the management of financial flows. Conversely, rigorous tax planning supports informed decision-making, optimises cash management and underpins investment and expansion projects.

For companies engaged in cross-border transactions, tax planning is particularly important. It makes it possible to navigate the various local laws, avoid double taxation and optimise the costs attached to international financial flows.

The key steps of effective tax planning

Analysing the situation and identifying the levers

The first step is to analyse the company's tax and financial situation, taking into account its activities, its legal form and its day-to-day operations.

This analysis identifies the regimes that can actually be used in the circumstances: French tax consolidation, the parent-subsidiary regime, contribution-and-sale transactions with tax deferral, the pacte Dutreil (a French regime easing the transfer of family businesses), the IP Box regime for industrial property income, the carry-forward of losses, the deduction of financial expenses within statutory limits and, depending on the case, sector-specific incentive schemes (corporate philanthropy, the young innovative company (JEI) status, urban free zones).

Structuring the transactions

On the basis of this analysis, MOSAIK advises you on the structure best suited to your objectives: choice of corporate form, organisation of financial flows, structuring of external growth transactions and optimisation of executive compensation mechanisms.

Ongoing monitoring and adjustment

Tax legislation changes constantly, and so does the company's business. Effective tax planning relies on regular monitoring and continuous adaptation to regulatory changes. This vigilance maintains compliance, anticipates risk and captures the benefit of the most recent tax measures.

Pillar Two: the new architecture of group taxation

Pillar Two of the OECD / G20 agreement on global minimum taxation, transposed into French law by the Finance Act for 2024, requires groups with consolidated revenue exceeding 750 million euros to bear a minimum effective tax rate of 15 percent in each jurisdiction where they operate. The regime is built around three complementary mechanisms: the qualified domestic minimum top-up tax (QDMTT), the income inclusion rule (IIR) and the undertaxed profits rule (UTPR). For the groups concerned, tax planning changes in nature: the aim is no longer to minimise the effective rate but to map its impact country by country, anticipate the jurisdictions where top-up tax will be due, and prepare the GloBE Information Return (GIR) expected within 18 months of the close of the first financial year concerned.

MOSAIK carries out these analyses for its clients as one integrated team (French taxation, bilateral treaties, the law of the jurisdictions of operation) and coordinates with finance teams the implementation of the Pillar Two compliance framework.

The risks of inadequate tax planning

Inadequate tax planning can have significant consequences:

• Tax reassessments and penalties: the penalty scale of the French Tax Code (CGI) is strictly graduated. Poorly documented planning exposes the taxpayer to the heaviest characterisation, and the tax authorities have an extended reassessment period (up to 10 years) for undeclared assets held abroad;
• Unexpected costs: errors in structuring international transactions can generate unanticipated tax charges;
• Reputational risk: poor tax management can undermine the confidence of investors and business partners;
• Operational blockages: structures that are poorly designed from a tax standpoint can complicate later fundraisings or disposals.

Family offices and international wealth planning

For business owners and families with significant wealth, tax planning extends beyond operational flows alone: structuring of family holding companies, coordination between corporate income tax and personal income tax, preparation of business succession through the pacte Dutreil, optimisation of the French real estate wealth tax (IFI), management of latent capital gains on expatriation (exit tax), and structuring of foundations or trusts for international estates. MOSAIK's Paris, Mexico City and Hong Kong triangle is particularly well suited to families with French-Latin American or French-Asian ties, whose succession and tax issues span several legal systems.

MOSAIK's tax planning services

Our practice draws on the full toolkit of the practising tax lawyer: the general binding tax ruling (Article L. 80 B of the LPF) to secure a transaction before it is carried out, specific rulings (research tax credit, philanthropy, abuse of law, JEI status, capital gains on disposal), advance pricing agreements (APA), settlement requests and voluntary disclosure procedures. This toolkit, often underused, makes it possible to obtain a formal, binding position from the tax authorities and to turn an area of legal uncertainty into documented certainty.

MOSAIK's tax practice combines two complementary profiles: Jonathan Boudet, a tax attorney with deep experience of French corporate taxation and tax litigation, and Izzat-Begum B. RAJAN, who spent nearly 25 years in senior tax leadership roles within international groups (Maersk, AKDN, EY Equity Partner) and now advises governments and the European Union on the taxation of digital assets. This pairing of a French practitioner with international corporate experience gives our clients a reading of their tax choices that is both technical and strategic.

Frequently asked questions

Does a tax ruling really protect against a later reassessment?

Yes, under the strict conditions of Article L. 80 B of the French Tax Procedure Code (LPF): a complete and good-faith presentation of the situation, no change in the facts, and application of the regime as presented. The position taken by the tax authorities is then binding on them and protects against any challenge to the characterisation, except where the administrative doctrine or the law changes. The ruling is one of the few tools that turns tax uncertainty into enforceable legal certainty, and it remains underused in practice.

How do you combine French tax planning with operations in Mexico or Hong Kong?

The France-Mexico and France-Hong Kong tax treaties contain specific provisions on withholding taxes, the definition of permanent establishment and the elimination of double taxation. MOSAIK's direct presence in Mexico City and Hong Kong allows us to structure these operations as one integrated team, without systematically relying on local correspondents, which shortens timelines and keeps the strategy consistent.