Law & Numbers - News Tax


14.04.2008 (France)

FRANCE - CIT – Contribution of an ongoing business – Tax free regime – Breach of ruling

According to article 210 B CGI, when a company sells the shares received in remuneration of the transfer of an ongoing business benefiting from the tax free regime, the related gain and reserves become taxable.

In a decision dated July 13, 2007, the French Supreme administrative court judged that the capital gain and the reserves are taxable the year of the sale of the shares, at the rate applicable to this Fiscal Year, and not, as claimed by the French tax authorities, the year of the contribution, at the tax rate applicable to this year.

This decision is favourable because of the decrease of the CIT rate and because of the exemption of the capital gain on participating shares.

For further information, Please contact Marylène BONNY-GRANDIL:

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