New French Tax Could Pressure Atlas Arteria’s Earnings and Cash Flow Next Year
Atlas Arteria reveals it will face a significant temporary supplemental tax under France’s new 2025 Finance Law, impacting its APRR Group operations with payments due late next year.
- New French Finance Law introduces a temporary supplemental tax for 2025 on large companies
- Tax applies to companies with revenues over €1 billion, with higher rates for revenues exceeding €3 billion
- APRR Group, part-owned by Atlas Arteria, expected to fall into the highest tax bracket
- Payment schedule requires 98% of tax due by December 2025, balance in April 2026
- Final law implementation pending Constitutional Council review and presidential signature
New French Tax Targets Large Revenue Companies
On 6 February 2025, the French Parliament adopted the Finance Law for 2025, introducing a temporary supplemental tax aimed at companies with substantial revenues. This tax specifically targets firms generating €1 billion or more in revenue during 2024 or 2025, signaling a new fiscal approach to large corporate contributors in France.
The tax is structured in two tiers: companies with revenues between €1 billion and €3 billion will face a supplemental tax calculated at 20.6% of their combined corporate income tax liabilities for 2024 and 2025. Those exceeding €3 billion in revenue will be subject to a steeper rate of 41.2%, reflecting the government’s intent to extract greater contributions from the largest players.
Atlas Arteria’s APRR Group in the Crosshairs
Atlas Arteria, which holds a 30.82% stake in the APRR toll road group, anticipates that APRR will fall into the higher tax bracket due to its revenue scale. APRR, alongside the adjacent ADELAC motorway network, operates an extensive 2,424-kilometre toll road system in eastern and southeastern France, underpinning its substantial revenue base.
The company has flagged that the tax will require a significant cash outflow, with 98% of the anticipated amount payable by December 2025 and the remainder due in April 2026. This timing places pressure on Atlas Arteria’s financial planning and capital management strategies for the coming fiscal year.
Legislative Process and Broader Implications
While the Finance Law has been adopted by Parliament, it remains subject to review by the French Constitutional Council and the signature of the French President before becoming effective. This procedural step introduces some uncertainty regarding the final form and timing of the tax’s enforcement.
For Atlas Arteria, the new tax represents a material regulatory development that could weigh on earnings from its French assets. Investors will be watching closely to see how the company adjusts its forecasts and whether it can mitigate the impact through operational efficiencies or pricing strategies.
Beyond Atlas Arteria, this tax signals a broader trend of increased fiscal scrutiny on large multinational companies operating in France, potentially influencing investment decisions and corporate structuring in the region.
Bottom Line?
Atlas Arteria’s exposure to France’s new supplemental tax underscores the evolving fiscal landscape for infrastructure operators in Europe.
Questions in the middle?
- How will Atlas Arteria adjust its financial guidance to account for the new tax burden?
- Could the company pass on some of the tax cost through toll price increases on APRR and ADELAC?
- What impact might this tax have on Atlas Arteria’s capital allocation and dividend policy in 2025?