French General Tax Code
In forceThe capital gains that may arise from a transaction referred to in article 48 of law n° 78-763 of 19 July 1978 on the status of sociétés coopératives de production are taxable in the name of the société coopérative de production under the following conditions:
a. Capital gains relating to non-depreciable fixed assets are subject to a deferral of taxation until the disposal, for consideration, of these fixed assets by the société coopérative de production. These capital gains are calculated on the basis of the value that these fixed assets had for tax purposes in the balance sheet of the converted company;
b. Capital gains relating to other fixed assets are added back, in fifths, to the net operating surpluses taxable over a period of five years following the conversion. In return, subsequent depreciation and capital gains relating to these fixed assets are calculated on the basis of the value attributed to them at the time of the transaction referred to in the first paragraph.
The valuation difference referred to in the last paragraph of the article 49 of the aforementioned law no. 78-763 of 19 July 1978 may not give rise to any deduction in respect of the financial year in which the transformation operation is carried out or any subsequent financial year.
