French General Tax Code
In forceThe basis of assessment for real estate wealth tax is the net value at 1 January of the year:
1° Of all the property and property rights belonging to the persons mentioned in article 964 as well as to their minor children, when they have the legal administration of the latter's property;
2° Of the units or shares of companies and organisations established in France or outside France belonging to the persons mentioned in 1° of this article, up to the fraction of their value representing property or property rights held directly or indirectly by the company or organisation.
To determine the fraction mentioned in the first paragraph of this 2°, a coefficient is applied to the value of the units or shares determined in accordance with the provisions of article 973, corresponding to the ratio between, on the one hand, the real market value of the taxable property or property rights and, where applicable, the value of the units or shares representing these same assets and, on the other hand, the real market value of all the assets of the company or organisation mentioned in the first paragraph of this 2°.
Units or shares of companies or organisations mentioned in the same first paragraph that carry on an industrial, commercial, craft, agricultural or liberal activity in which the taxpayer holds directly and, where applicable, indirectly, alone or jointly with the persons mentioned in 1°, less than 10% of the capital and voting rights are not taken into account.
For the purposes of determining the fraction referred to in the first paragraph of this 2°, the shares in companies or organisations whose business is an industrial, commercial, craft, agricultural or liberal profession held, directly or indirectly, by the company or organisation referred to in the same first paragraph, are not taken into account where the taxpayer holds indirectly and, where applicable, directly, alone or jointly with the persons referred to in 1°, less than 10% of the capital and voting rights in these companies or organisations.
By way of exception to the third and fourth paragraphs of this 2°, for the purposes of determining the fraction referred to in the first paragraph of this 2°, subject to the exclusions provided for in a and b of this 2°, the property and property rights held directly by the companies or bodies that the taxpayer, alone or jointly with the persons referred to in 1° of this article, controls within the meaning of 2° of III of Article 150-0 B ter, or which the taxpayer or one of the persons mentioned in 1° of this article reserves the right to use in fact or in law.
The fraction mentioned in the first paragraph of this 2° shall not be calculated:
a) Property or property rights held directly by the company or body referred to in the same first paragraph or by a company or body of which the company or body referred to in the said first paragraph directly or indirectly holds shares, where such property or property rights are allocated to the industrial, commercial, craft, agricultural or liberal profession activity of the company or body that holds them;
b) Where the taxpayer directly or indirectly holds shares in a company or body whose business is an industrial, commercial, craft, agricultural or liberal profession activity, the property or property rights held directly or indirectly by this company or body that are assigned to its industrial, commercial, craft, agricultural or liberal profession activity; that of the company or body that holds them directly; or that of a company or body in which the company or body holds, directly or through an intermediary, a majority of the voting rights or exercises de facto decision-making power.
3° No increase is made if the taxpayer, in good faith, demonstrates that he was unable to obtain the information necessary to estimate the fraction of the value of the units or shares mentioned in the first paragraph of 2° of this article representing the property or property rights that he holds indirectly.
The first paragraph of this 3° does not apply if the taxpayer controls, within the meaning of 2° of III of article 150-0 B ter, the company or organisation that directly holds the taxable property or property rights or if one of the persons mentioned in 1° of this article reserves, in fact or in law, the enjoyment of the property or property rights that the taxpayer indirectly holds or if the taxpayer directly or indirectly holds, alone or jointly with the persons mentioned in the same 1°, more than 10% of the capital or voting rights of the company or body that directly holds the taxable property or property rights.
