I: Compulsory taxable transactions

I. - Transactions contributing to the production or supply of immovable property are subject to value added tax under the following conditions.

1. The following are treated in the same way as tangible property and are subject to the same rules as the immovable property to which they relate:

1° Rights in rem in immovable property, with the exception of rentals resulting from leases which confer a right of enjoyment;

2° Rights relating to promises to sell;

3° Units of interest and shares the possession of which ensures in law or in fact the allocation in ownership or in enjoyment of an immovable property or a fraction of an immovable property;

4° Rights under a trust contract representative of an immovable property.

2. The following are considered:

1° Building land, land on which construction may be authorised pursuant to a local town planning plan, another local town planning document, a local map or Article L. 111-3 of the town planning code;

2° As new buildings, buildings that have not been completed for more than five years, whether they result from a new construction or from work on existing buildings that has consisted of an elevation or that has made them as new :

a) Either the majority of the foundations;

b) Or the majority of the elements other than the foundations that determine the strength and rigidity of the structure;

c) Or the majority of the consistency of the facades excluding rendering;

d) Or all of the finishing elements as listed by decree in the Conseil d'Etat, in a proportion set by this decree that may not be less than half for each of them.

3. The following are also subject to value added tax:

1° The self-supply of real estate work mentioned in Article 278 sexies A carried out by taxable persons within the meaning of article 256 A ;

2° The self-supply of immovable property referred to in article 278 sexies carried out outside an economic activity, within the meaning of article 256 A, by any person who is therefore taxable in this respect.

II. - The following transactions are treated as supplies of goods or services for consideration, as appropriate.

1. The following are treated in the same way as supplies of goods for consideration:

1° The removal by a taxable person of goods from his business for his own private use or that of his staff, or which he transfers free of charge or, more generally, which he uses for purposes other than those of his business, where the goods or their component parts have given rise to full or partial deduction of value added tax. However, this does not apply to deductions made for business purposes to give gifts of low value and samples. The amount to be taken into account for the taxation of deductions corresponding to gifts of low value is set by decree. This limit applies per object and per year for the same beneficiary;

2° The allocation by a taxable person to the needs of his business of an item produced, constructed, extracted, processed, purchased, imported or having been the subject of an intra-Community acquisition in the context of his business when the acquisition of such an item from another taxable person, deemed to have been made at the time of allocation, would not entitle him to full deduction.

3° The allocation of an asset by a taxable person to an exempt sector of activity that does not give entitlement to deduction, where this asset gave entitlement to a full or partial deduction of value added tax when it was acquired or allocated in accordance with 2°;

4° The holding of assets by a taxable person or by his successors in title where his taxable economic activity ceases, where these assets gave entitlement to a full or partial deduction when they were acquired or allocated in accordance with 2°.

2. The following are treated in the same way as supplies of services for consideration:

1° The use of property allocated to the business for the private needs of the taxable person or for those of his staff or, more generally, for purposes unrelated to his business, where this property has given entitlement to full or partial deduction of value added tax;

2° The supply of services free of charge by the taxable person for his private needs or for those of his staff or, more generally, for purposes unrelated to his business.

3. A decree of the Conseil d'Etat defines the transactions referred to above and the time at which the tax becomes chargeable.

III. - The following are also subject to value added tax:

1° The transfer of aircraft or aircraft components by the air navigation companies mentioned in 4° of II of article 262 to other companies that do not meet the conditions set out in this article. The terms and conditions for the application of this provision are laid down, as necessary, by orders of the Minister responsible for the economy and finance;

2° The goods and products mentioned in 2° and 3° of II of Article 262 when they cease to be used under the conditions laid down by this article. The detailed rules for the application of this provision are laid down, where necessary, by orders of the Minister responsible for the economy and finance;

3° (Repealed);

4° (Repealed).