French tax consolidation: definition, conditions and how it works

Updated March 2026 - French tax consolidation (intégration fiscale) allows a group of companies subject to corporate income tax (IS) to compute a single consolidated taxable result at the level of the parent company, rather than filing separate returns for each entity. This can deliver real tax efficiency — but only when the group is genuinely managed as a group.

For additional context, see our guide on holding companies and tax optimisation, our article on contributing shares to a holding and our analysis of dividend distribution rules and taxation.

To elect for the French tax consolidation regime (under articles 223 A and following of the Code général des impôts), four conditions must be met:

• ▸the parent company must be subject to French corporate income tax at the standard rate;
• ▸the subsidiaries included in the tax group must also be subject to French IS;
• ▸the parent must hold — directly or indirectly — at least 95% of the capital of each subsidiary;
• ▸the group must formally elect for the regime and maintain the election annually.

When structured correctly, the regime produces three main operational benefits:

• ▸offsetting of profits and losses across entities: a loss in one subsidiary reduces the consolidated taxable base, lowering the overall group tax charge;
• ▸better visibility on the consolidated IS burden: instead of managing separate company-level IS positions, the parent consolidates the picture and can model the group tax charge as a whole;
• ▸finer management of intragroup tax flows: advance payments, tax credits and certain eliminations can be managed at group level rather than entity by entity.

The regime is not a simple election. The real cost of the regime lies in its compliance requirements:

• ▸high formalism: specific declarations (form 2058-SD and related annexes), elimination of certain intragroup transactions and annual renewal of the election;
• ▸need for reliable company-level accounting data: the consolidated tax result is built from individual entity results — any accounting error at subsidiary level contaminates the group calculation;
• ▸technical restatements: certain intragroup transactions (dividends, capital gains, transfers) require specific adjustments under the consolidation rules;
• ▸higher overall compliance cost: the regime requires more accounting and tax resources than filing separately, which must be weighed against the actual tax benefit.

Hayot Expertise advice: tax consolidation is only relevant if the group is actually managed as a group. When subsidiaries operate as silos with no genuine financial coordination, the regime generates formalism without delivering real value. The decision to elect should follow a proper cost-benefit analysis using the group's actual numbers.

We can model the consolidated taxable result, verify the eligibility of the proposed perimeter and calculate the effective tax gain — before you commit to filing the election.

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Tax consolidation is a powerful tool for French corporate groups, but it is never automatically the right choice. It requires adequate ownership levels, reliable accounting quality at every entity level and a genuine tax management discipline at group level.

📞 Want to know whether your group would benefit from electing for tax consolidation? We can compare the consolidated and non-consolidated scenarios using your actual figures. Book an appointment with an expert

(Official sources: articles 223 A and 223 R of the Code général des impôts, BOFiP guidance on the group regime, form 2058-SD)