French General Tax Code
In forceIn the event of the transfer or redemption of the rights of a shareholder, a natural person, in a company mentioned in
articles 8and
8 ter, who carries out a non-commercial professional activity within the meaning of 1 of the
article 92and which is compulsorily subject to the controlled declaration regime, income tax may be immediately assessed in the name of this partner for his share in the results, determined under the conditions provided for in articles 93 or 93 A, realised since the end of the last tax period until the date of this event. This measure applies at the joint request of the shareholder whose shares are transferred or repurchased or his successors and the beneficiary of the transfer or, in the event of a repurchase, the shareholders present in the company on the date of the repurchase.
The beneficiary of the transfer of the securities is then taxable on the basis of the share corresponding to his rights in the profit made by the company during the tax year, less the share of the profit taxed under the conditions provided for in the first paragraph. If the company repurchases the securities, the shareholders present in the company on 31 December of the tax year are taxed on the basis of the profit made by the company during the tax year, less the share of the profit taxed, under the conditions provided for in the first paragraph, in the name of the shareholder whose securities were repurchased.
A decree sets out the terms and conditions for the application of this article, in particular the taxpayers' reporting obligations (1).
(1) These provisions apply as from the taxation of income for 1997.
