French General Tax Code
In forceI. - Unless otherwise decided by the municipality or the public establishment for inter-municipal cooperation with its own tax system, in rural regeneration zones, with the exception of those mentioned in B of II of this article, companies that carry out the operations mentioned in the first paragraph of article 1465 under the conditions and subject, where applicable, to the approval provided for in this article are exempt from business property tax. This exemption may not have the effect of deferring the application of the ordinary law taxation system for more than five years.
This exemption also applies to business start-ups in rural regeneration zones carried out by artisans who mainly carry out manufacturing, processing, repair work or the provision of services and for whom remuneration for work represents more than 50% of overall turnover, including all duties and taxes, or by businesses that carry out a professional activity within the meaning of the first paragraph of l'article 92. In municipalities with fewer than two thousand inhabitants, the exemption also applies to the creation of commercial activities and to the takeover of commercial, craft or professional activities within the meaning of 1 of Article 92, carried out by companies carrying out the same type of activity, provided that during the reference period taken into account for the first year of taxation, the activity is carried out in the establishment with fewer than five employees.
II. - A. - Communes that are members of a public establishment for inter-communal cooperation with its own tax system that meets the following conditions are classified as rural revitalisation zones:
1° Its population density is less than or equal to the national median density of public establishments for intercommunal cooperation with their own tax status in mainland France or its population has been declining by 30% or more over the last four decades, provided that it is located in an arrondissement made up predominantly of communes classified as rural revitalisation zones and whose population is greater than 70% of the arrondissement ;
2° Its median tax income per consumption unit is less than or equal to the median of median incomes per metropolitan public intercommunal cooperation establishment with its own tax system.
The data used is drawn up by the Institut national de la statistique et des études économiques on the basis of data available at 1 January of the year of classification. The population taken into account for the calculation of population density is the municipal population defined in article R. 2151-1 of the General Local Authorities Code.
The classification of communes as rural regeneration zones is established by order of the ministers responsible for the budget and regional planning. It is revised on 1 January of the fourth year following the general renewal of the community councils.
A change in the perimeter of a public inter-communal cooperation establishment with its own tax system only has an effect on the classification from the revision mentioned in the fifth paragraph of this A.
For the communes mentioned in V of Article L. 5210-1-1 of the General Code of Territorial Authorities, the classification criteria are assessed at the communal level.
B. - The communes of French Guyana, as well as those of La Réunion included in the special rural action zone delimited by decree, are classified as rural revitalisation zones.
III. - The fifth, sixth, seventh and ninth paragraphs of article 1465 are applicable to the exemption provided for in I of this article. However, for the application of the ninth paragraph of article 1465, the tax is assessed in favour of the State.
The exemption remains applicable for its remaining duration when the commune in which the business is located ceases to be classified as a rural revitalisation zone after the date on which the business is created or taken over.
IV. - The benefit of exemptions granted from 1 January 2014 is subject to compliance with Commission Regulation (EU) No 1407/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid. However, at the option of companies carrying out the operations mentioned in I in regional aid areas from 1 July 2014, the benefit of the exemptions is subject to compliance with Article 14 of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty.
This option, exercised separately for each of the establishments concerned, is irrevocable for the duration of the exemption. It must be exercised, depending on the case, within the deadline set for filing the annual return relating to the first year in respect of which the exemption takes effect or the provisional business property tax return referred to in article 1477.
