French General Tax Code
In forceIn the absence of the creation of a new legal entity, when a company or other body ceases in whole or in part to be subject to corporation tax at the standard rate, profits subject to deferred taxation, unrealised capital gains included in the company's assets and profits not yet taxed on stocks are not subject to immediate taxation, on the dual condition that no changes are made to the accounting entries and that taxation of the said profits, capital gains and profits remains possible under the new tax regime applicable to the company or body concerned.
The first condition is not required of companies when they opt for the regime provided for in Article 208 C for their fixed assets other than those referred to in IV of l'article 219, if they undertake to calculate any capital gains realised at a later date on their disposal on the basis of the value they had, for tax purposes, at the close of the financial year preceding entry into the scheme. Companies benefiting from this provision must attach to their income tax return a statement showing the information required to calculate the taxable income from the subsequent disposal of the fixed assets in question. This statement is drawn up and audited in the same way as that provided for in Article 54 septies and subject to the same guarantees and penalties.
However, capital gains generated on the disposal of all or part of the fixed asset items existing on the date on which the company or organisation ceased to be subject to corporation tax at the standard rate, insofar as they were acquired on that date by the item or items disposed of, are taxable in accordance with the regime defined in articles 39 duodecies et seq, if, at the time of the transfer, the revenue of that company does not exceed the limits provided for, as the case may be, in II, III and IV of Article 151 septies. In this case, the provisions of article 151 septies do not apply.
