2: Determination of taxable profits

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Article 38 bis

French General Tax CodeIn force
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Updated 8 Nov 2023

I. - 1. Financial securities lent by a company are taken in priority from securities of the same nature acquired or subscribed to at the most recent date.

The claim representing the financial securities lent is recorded separately in the balance sheet at the original value of these securities.

At the end of the loan, the financial securities returned are recorded in the balance sheet at this same value.

2. The remuneration allocated in return for the securities loan constitutes debt income. Where the lending period covers the date of payment of the income attached to the securities lent, the amount of the remuneration may not be less than the value of the income waived by the lender. The portion of the remuneration corresponding to this income is subject to the same tax treatment as the income from the securities loaned.

II. - 1. The financial securities borrowed and the debt representing the obligation to return these securities are recorded separately on the borrower's balance sheet at the market price on the day of the loan.

At the close of the financial year, the financial securities borrowed which appear on the borrower's balance sheet and the debt representing the obligation to repay which results from the contracts in progress are recorded at the price that these securities have on the market on that date.

The financial securities borrowed are deemed to be repaid at the value for which the debt representing the obligation to repay appears on the balance sheet.

1 bis. Borrowed securities may be the subject of a loan. In this case, the debt representing the securities referred to in 1 must be entered in the balance sheet at the price that these securities have on the market on the date of the new loan.At the close of the financial year, this debt must be valued at the price of the securities on that date. When they are returned, the borrowed securities that were the subject of a loan are taken back for the value of the receivable on that date and are then valued in accordance with the procedures set out in 1 until they are sold or returned to the original lender.

2. When the borrower disposes of financial securities, these are taken in priority from securities of the same nature borrowed on the earliest date. Subsequent purchases of securities of the same type are allocated by priority to the replacement of the securities borrowed.

II bis. - (repealed)

III. - 1. If the loaned securities are not returned, from a tax point of view they are sold on the date of default.

2. For the purposes of Article 39 duodecies, the loaned securities are deemed to have been held until the date of the loan.

Mariela Petrova

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Mariela Petrova

Mariela Petrova

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