“Rather than fight against tax evasion, the government prefers to make France a tax haven for the biggest companies”

VSach year, the more than 460 tax loopholes in France cost nearly 90 billion euros to the state budget. From 1^er January 2023, we will have to add the hundreds of millions that will cost a new niche, adopted on the sly: that in favor of reinsurance captives. Reinsurance captives are subsidiaries of a company whose purpose is to play the role of insurer for the risks incurred by the parent company.

This practice allows these companies not to resort to traditional insurers and therefore to cover the risks of very large companies at a lower cost. Although debatable with regard to the questions of concentration that it raises, this practice would not pose a problem if it only served to play the role of precautionary savings. However, the use of captive reinsurance companies has become a means of tax optimization.

Of the hundred or so captives held by French companies, less than ten are domiciled in France for tax purposes. Bermuda alone hosts a third of the captive insurance companies on the planet, the others are shared between Luxembourg, Ireland, Malta, Delaware and the Cayman Islands. Whereas “ France is to the nearest euro »according to Bruno Le Maire, the discipline of Bercy is shattered when the government wishes to make a tax gift to the largest companies.

A new niche

After the abolition of the contribution on the added value of companies (CVAE), the final text – post-49.3 – contains a provision making it possible to tax-exempt the resources transferred to captive reinsurers by the largest companies. The new article 3 quater A of the finance law for 2023 provides that “ captive reinsurance companies (…) may constitute, free of tax, a provision intended to cover the expenses relating to reinsurance operations ».

In other words, thanks to the advice of their accountants and tax experts, large companies will be able to artificially transfer part of their profits – taxable – to these captive reinsurers, which will not be taxed.

Fiscally, this new provision is nothing more than a new niche which will only benefit large companies which have the means to set up a captive insurance company but which, out of greed, refuse to go through the insurance market. and free from tax at the normal rate. According to Gabriel Attal, Minister for Action and Public Accounts, this would be a way of responding to market failures.

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