2 undecies: Companies located in dynamic urban areas

I.-In the urban areas to be revitalised defined in II, companies that are created between 1 January 2018 and 31 December 2023 and, when they are located in the communes mentioned in the sixth paragraph of the same II, companies that are created between 1 January 2019 and 31 December 2023, that carry out an industrial, commercial or craft activity within the meaning of Article 34 are exempt from income tax or corporation tax on profits made, with the exception of capital gains recognised on the revaluation of assets, until the end of the twenty-third month following that of their creation and declared in accordance with the procedures set out in Articles 50-0 and 53 A.

Profits are only subject to income tax or corporation tax for one quarter, half or three quarters of their amount depending on whether they are made, respectively, during the first, second or third twelve-month period following this exemption period.

II.Communes belonging to a group of communes mentioned in V of article L. 5210-1-1 of the Code général des collectivités territoriales (General Code of Territorial Authorities) or contiguous public establishments for intercommunal cooperation with their own tax status with a population of at least one million and which meet the following conditions:

1° The population density of the commune is higher than the national average;

2° The median disposable income per consumption unit of the commune is lower than the national median of median incomes;

3° The unemployment rate of the commune is higher than the national rate;

4° 70% of the population of each public inter-communal cooperation establishment lives in communes falling under 1° to 3°.

Also classified in an urban catchment area to be boosted are municipalities that meet the conditions set out in 1° to 3° and that border at least one municipality classified as an urban catchment area to be boosted pursuant to this II, in its wording in force on 1 January 2018.

The data used is drawn up by the Institut national de la statistique et des études économiques from that available on 31 December of the year preceding the year of classification. The population taken into account is the municipal population defined in Article R. 2151-1 of the General Local Authorities Code in the version in force on the date of publication of Act No. 2017-1775 of 28 December 2017 on the rectifying finances for 2017.

The classification of communes as urban areas to be revitalised is established on 1 January 2018 and for a period of six years by order of the ministers responsible for the budget and spatial planning.

The classification of communes mentioned in the sixth paragraph of this II as urban areas to be revitalised is established on 1 January 2019 and for a period of five years by order of the ministers responsible for the budget and spatial planning.

III.-.To benefit from the exemption mentioned in I, the company must meet the following conditions:

1° The company is a small or medium-sized enterprise within the meaning of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty;

2° The company's registered office and all of its business and operating resources are located in the areas mentioned in II.

When a company carries out a non-sedentary activity, carried out in part outside the aforementioned catchment areas, the location condition is deemed to be met if it achieves no more than 15% of its turnover outside this catchment area. In excess of 15%, profits made are subject to income tax or corporation tax under the conditions of ordinary law in proportion to the sales made outside the above-mentioned catchment areas. This turnover condition is assessed on a financial year by financial year basis;

3° The company's capital is not held, directly or indirectly, for more than 50% by other companies.

The capital of a newly created company is held indirectly by other companies when at least one of the following conditions is met:

a) A shareholder holds a de jure or de facto management or supervisory position in another company, where the latter's business is similar to or complementary to that of the newly created company;

b) A shareholder holds, together with the members of his tax household, at least 25% of the corporate rights in another company whose activity is similar to that of the newly created company or is complementary to it;

4° The company is not created as part of a takeover, transfer, concentration, restructuring or extension of pre-existing activities.

The existence of a contract, by whatever name called, the purpose of which is to organise a partnership characterises the extension of a pre-existing business where the newly-created company benefits from the assistance of that partner, in particular as regards the use of a sign, a trade name, a brand or know-how, supply conditions, or administrative, litigation, commercial or technical management arrangements, under conditions such that that company is placed in a situation of dependence ;

5° On the closing date of the financial year or tax period in respect of which the exemption applies:

a) The number of employees whose employment contract is open-ended or was concluded for a fixed term of at least twelve months and who reside in the urban area to be boosted is equal to at least half of the total number of employees employed under the same conditions. Part-time employees are taken into account on a pro rata basis according to the number of hours worked under their contract;

b) Or the number of employees taken on as from the creation of the company and fulfilling the conditions described in a) is equal to at least half of the total number of employees taken on under the same conditions, during the same period.

IV.-When it meets the conditions required to benefit from one of the schemes provided for in articles 44 sexies, 44 sexies A, 44 octies A, 44 duodecies, 44 terdecies, 44 quindecies or 44 septdecies and the scheme provided for in this article, the company may opt for the latter scheme within six months of starting its business. The option is irrevocable and entails definitive renunciation of the other schemes.

V.-In regional aid areas, the benefit of the exemption is subject to compliance with Articles 13 and 14 of Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty.

Outside regional aid areas, the benefit of the exemption is subject to compliance with Article 17 of the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014.