SAP Case: When to Assess the Interest of a Cash Pool Participant in Centralized Cash Management?

The French Administrative Supreme Court (Conseil d'Etat) requires the judge, regarding the remuneration of deposits made by a cash pool participant in a centralized cash management agreement, to assess the company’s interest as of the date the agreement was concluded, taking into account the scope of its contractual commitments. Thus, the mere application of a 0% floor rate instead of a negative rate resulting from the stipulated formula does not, in itself, constitute a benefit granted to the cash pool leader.
These rulings confirm the burden of proof on the French tax authorities to evaluate the remuneration by focusing on the company’s situation at the time the agreement was concluded, as well as any obligations that may arise thereafter.
Read the analysis of Théophile Trancart, published in the Revue de droit fiscal on October 13, 2022.