French General Tax Code
In forceThe provisions of this article apply to capital gains, other than those referred to in the second paragraph of II of article 238 octies, realised before the entry into force, under conditions set by decree in the Conseil d'Etat, of articles 39 duodecies to 39 quindecies A.
1. Capital gains, other than those realised on goods, resulting from the free allocation of shares or corporate units (capital shares), following mergers of sociétés anonymes, en commandite par actions or à responsabilité limitée are exempt from corporation tax.
2. The same regime applies where a société anonyme, en commandite par actions or à responsabilité limitée contributes:
1° All of its assets to two or more companies formed for this purpose in one of these forms, provided:
a. That the companies receiving the contributions are all of French nationality; however, for the application of these provisions, companies incorporated under the terms of French law and having their registered office in the overseas departments, Saint-Pierre-et-Miquelon, Mayotte, New Caledonia, French Polynesia, the Wallis and Futuna Islands and the French Southern and Antarctic Territories are treated in the same way as companies of French nationality.
b. That the contributions result from agreements taking effect on the same date for the various companies that benefit from them and entail, upon their completion, the immediate dissolution of the contributing company.
2° Part of its assets to another company formed in one of these forms, provided that:
a. The company receiving the contribution is of French nationality within the meaning of a of 1°;
b. The contribution has been approved in advance by the Minister of the Economy and Finance.
3. The application of the provisions of this article is subject to the obligation, set out in the deed of merger or contribution:
a. To calculate, in respect of items other than the goods included in the contribution, the annual depreciation to be deducted from profits and any subsequent capital gains resulting from the realisation of such items on the basis of the cost price that they represented for the merged companies or for the transferring company, less any depreciation already carried out by them;
b. To immediately record as liabilities, against the assets assumed, provisions for the renewal of tools and equipment equal to those appearing at the time of the merger or contribution in the accounts of the merged companies or the transferring company and which related to the contributed items.
This obligation is incumbent, in the case referred to in 1, on the acquiring or new company and, in the cases referred to in 2, either respectively on the companies receiving the contributions in proportion to the value of the assets allocated to them, or on the company receiving the partial contribution.
The obligation provided for in a does not apply to mergers or contributions referred to in 1 and 2° of 2 which were carried out before 1 January 1950, provided that they have received the approval of the Ministry of Finance after advice from the commissariat général du plan d'équipement et de la productivité
4. The provisions of this article are applicable to the capital gains referred to in I of article 238 octies.
