There are two series of exemptions :  - Inside the EU, the foreign entity established in a member State will not be subject to the CFC rules, unless  the French tax authorities demonstrate that the foreign entity located in another EU country constitutes an artificial arrangement, set up to circumvent French tax legislation ;  -In other cases, if a French company falls within the scope of CFC, it can be exempted if it demonstrates that the operations of the entity established outside France are primarily intended to have an object and effect other than to transfer profits in a State or territory where it is subject to a preferential tax regime.This condition is deemed to be fulfilled when the entity established outside France has mainly an industrial or commercial activity.