French General Tax Code
In forceThe provisions laid down in this section in the event of a company leaving the group apply when a company in the group ceases to meet the conditions laid down for the application of the regime defined in this section.
The same applies if the parent company denounces one of the options provided for in the first, second, fourth or penultimate paragraphs of I of Article 223 A or the first paragraph of I of article 223 A bis which it has exercised, without formulating another of the options provided for in the same paragraphs, or remains the sole member of the group, or where the group ceases to exist because it does not satisfy one of the conditions provided for in this section.
When a legal entity that is a member of a group formed pursuant to the fourth paragraph of I of Article 223 A, other than the parent company, opts to become the parent company of that group, that option results in the termination of the first group. When a legal entity, other than the parent company of a group formed pursuant to the second paragraph of the same I, opts to become the parent company of this group, this option results in the termination of the first group.
If the regime provided for in article 223 A or article 223 A bis ceases to apply to all the companies in the group, the parent company must include in its taxable income for the financial year in which this regime is no longer applicable the sums that must be brought back to the overall income or net long-term capital gain or loss pursuant to the provisions of this section in the event of a company leaving the group.
The overall deficit or the overall net long-term capital loss incurred by the group during the period of application of the regime defined in article 223 A or in article 223 A bis and which may still be carried forward at the end of this period may be offset by the company which was liable for the taxes mentioned in the said article due by the group, against its profit or its net long-term capital gain, in accordance with the procedures set out in the third paragraph of I of article 209 or Article 39 quindecies. In the event of the absorption by the parent company of all the other companies in the group, resulting in a change in its corporate purpose or its actual activity within the meaning of the provisions of Article 5 of 221, this provision applies to the fraction of this deficit or capital loss that does not correspond to those incurred by the parent company.
The non-deducted net financial charges mentioned in 1 of VIII of article 223 B bis and the unused deduction capacity mentioned in 2 of the same VIII, which may still be carried forward at the end of the period of application of the regime defined in Articles 223 A or 223 A bis, may be used by the company which was liable for the taxes mentioned in the same Articles 223 A or 223 A bis due by the group, on its results according to the procedures set out in VIII of Article 212 bis.
The provisions set out in this section in the event of an exit from the group do not apply in the event of an absorption following a merger placed under the regime provided for in Article 210 A of the parent company by another company in the group which exercises one of the options mentioned in the first, second, fourth or penultimate paragraphs of I of Article 223 A or in the first paragraph of I of Article 223 A bis within the period provided for in the second paragraph of III of Article 223 A counted from the date on which the merger is completed.
