On 27 January, the EFB organised a morning session attended by magistrates, lawyers and forensic experts, as well as a member of the consultancy department of the National and International Audits Directorate (DVNI), to discuss issues relating to financial valuations in various tax contexts.
As court-appointed experts, the partners at SORGEM Evaluation took part in various round-table discussions.
- Valuation issues in the context of disposals and restructurings
The speakers outlined the key principles governing the valuation of company shares and the provisions of the French General Tax Code (CGI) – distinguishing between listed and private companies – discussed the premiums and discounts that may be applied, and set out the tax consequences of an incorrect valuation.
- Valuation issues in the context of intra-group transfer pricing
The speakers addressed intra-group interest rates and royalties relating to intangible assets (trademarks, patents, etc.). They discussed the latest developments in tax law and case law, and the role of the financial expert in analysing the borrower’s risk profile and valuing intangible assets using the various methods typically employed.
- Valuation issues in management packages
The speakers began by reviewing the existing mechanisms enabling employees to invest in their company’s securities. They outlined the latest developments, particularly in terms of taxation, which have led to changes in the types of securities in which managers can invest.
A presentation was given on the methods for valuing equity instruments (ADP Ratchet, BSA, call options) and interest rate instruments (interest rate ADPs, convertible bonds, shareholder loans, etc.).
The speakers also shared their experience of tax audits and litigation in this area and commented on recent rulings on the subject. This helped to highlight certain practices that can pose difficulties during tax audits.
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