French General Tax Code
In force1. The taxable profit or income consists of the excess of the gross proceeds, including the value of profits and benefits in kind, over the expenditure incurred in acquiring and maintaining the income.
2. The annual net overall income used as a basis for income tax is determined by totalling the net profits or income mentioned in I to VI of the 1st sub-section of this section as well as the income, net gains, profits, capital gains and receivables taken into account in the basis of assessment of this net overall income pursuant to 3, 6 bis and 6 ter of article 158, taking into account, where applicable, the amount of the deficits referred to in I of article 156, the expenses listed in II of the said article and the allowance provided for in article 157 bis.
3. The net profit or income of each of the categories of income referred to in 2 is determined separately in accordance with the rules specific to each of them.
The overall result of each category of income is obtained by totalling, where applicable, the profit or income relating to each of the businesses, holdings or professions falling within that category and determined in accordance with the conditions laid down for the latter.
4. For the application of 3, account is taken, where applicable, of the amount of profits corresponding to the rights that the taxpayer or the members of the tax household designated in 1 and 3 of article 6 hold as partners or members of companies or groupings subject to the partnership tax regime referred to in article 8.
5.1°. For the application of 3 and by way of derogation from the provisions of this code relating to the taxation of capital gains, the proceeds resulting from the first transfer for consideration of the same temporary usufruct or, if greater, the market value of this temporary usufruct is taxable in the name of the transferor, natural person or company or grouping covered by articles 8 to 8 ter, in the category of income to which, on the day of the transfer, the profit or income procured or likely to be procured by the property or right to which the temporary usufruct transferred relates is attached.
Where the temporary usufruct transferred relates to property or rights that provide or are likely to provide income falling into different categories, the proceeds resulting from the transfer of this temporary usufruct, or where applicable its market value, is taxable in each of these categories in proportion to the ratio between, on the one hand, the market value of the property or rights whose income falls into the same category and, on the other hand, the total market value of the property or rights to which the temporary usufruct transferred relates.
2°. For the application of 1° and in the absence of being able to determine, on the day of the transfer, a category of income, the proceeds resulting from the transfer of the temporary usufruct, or where applicable its market value, is taxed:
a) In the property income category, without application of II of Article 15, where the temporary usufruct transferred relates to real estate or to shares in companies, groupings or bodies, whatever their form, not subject to corporation tax and with a preponderance of real estate assets within the meaning of Articles 150 UB or 244 bis A ;
b) In the category of income from transferable capital, where the temporary usufruct transferred relates to transferable securities, company rights, securities or rights relating thereto, or to securities representing the same securities, rights or securities, mentioned in article 150-0 A;
c) In the category of non-commercial profits, in other cases.
