French General Tax Code
In forceI. - Where they do not fall within the scope of Article 757 B, sums, annuities or values of any kind owed directly or indirectly by one or more insurance and similar organisations, due to the death of the insured, are subject to a levy up to the amount of the share due to each beneficiary of these sums, annuities or values corresponding to the surrenderable portion of the contracts and the premiums paid in respect of the non-surrenderable portion of contracts other than those mentioned in 1° of I of Article 199 septies, than those mentioned in article 154 bis and in 1° of Article 998, with the exception of contracts covered by articles L. 224-1 et seq. of the Monetary and Financial Code contracts covered by article L. 225-1 of the same code, as well as those mentioned in article L. 7342-2 of the French Labour Code and taken out in the course of a professional activity, reduced by a proportional allowance of 20% for sums, values or annuities from the contracts mentioned in 1 of I bis and meeting the conditions set out in 2 of I bis, then by a fixed allowance of €152,500. The levy is 20% for the fraction of each beneficiary's taxable share less than or equal to €700,000, and 31.25% for the fraction of each beneficiary's taxable share exceeding this limit.
For the application of the levy provided for in the first paragraph of this I, sums, annuities or values of any kind due by reason of life annuities constituted in the context of a professional activity, a popular retirement savings plan provided for in article L. 144-2 of the Insurance Code, a retirement savings plan provided for in article L. 224-28 of the Monetary and Financial Code or a French sub-account of the pan-European individual retirement savings product mentioned in article L. 225-1 of the same code, in return for the payment of premiums regularly staggered in terms of amount and frequency over a period of at least fifteen years, with the earliest date of entitlement being the date of liquidation of the pension of the person liable for payment under a compulsory old-age insurance scheme or the age set in application of article L. 351-1 of the Social Security Code.
The beneficiary must provide the insurance and similar bodies with a sworn statement indicating the amount of deductions already applied to any sums, annuities or values received from one or more insurance and similar bodies in respect of the death of the same insured person.
The beneficiary is not subject to the levy referred to in the first paragraph if he is exempt from gratuitous transfer tax pursuant to the provisions of articles 795,795-0 A, 796-0 bis et 796-0 ter.
The beneficiary is subject to the levy provided for in the first paragraph if, at the time of death, he is domiciled for tax purposes in France within the meaning of article 4 B and that he has had it for at least six years during the ten years preceding the death or provided that the insured has, at the time of death, his tax domicile in France within the meaning of the same article 4 B.
In the event of dismemberment of the beneficiary clause, the bare owner and usufructuary are considered, for the purposes of this article, as beneficiaries in proportion to their share of the sums, annuities or values paid by the insurance undertaking, determined in accordance with the scale provided for in article 669. The allowances provided for in the first paragraph of this I are divided between the persons concerned in the same proportions.
I bis. - 1. The sums, values or annuities that benefit from the proportional allowance of 20% are those derived from contracts and investments of the same nature taken out as of 1 January 2014 or contracts taken out before this date and which have undergone, between 1 January 2014 and 1 January 2016, a partial or total transformation falling within the scope of I of Article 1 of the loi n° 2005-842 du 26 juillet 2005 pour la confiance et la modernisation de l'économie or 2° du I de article 125-0 A of this code and in which the premiums paid are represented by one or more units of account made up :
a) Units or shares in undertakings for collective investment in transferable securities;
b) Collective investments covered by articles L. 214-24-24 à L. 214-32-1 or L. 214-139 to L. 214-147 of the Monetary and Financial Code;
c) Undertakings of the same type as the undertakings mentioned in a and b established either in another Member State of the European Union, or in another State party to the Agreement on the European Economic Area which has concluded an administrative assistance agreement with France with a view to combating tax fraud and tax evasion and which benefits from the mutual recognition procedure for approvals provided for in Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (recast) ;
d) Units or shares in companies referred to in I of article 150 UB of this code having their registered office within the territory of one of the Member States of the European Union or in another State party to the Agreement on the European Economic Area that has concluded an administrative assistance agreement with France with a view to combating tax evasion and avoidance ;
e) Units or shares in real estate collective investment schemes or non-trading real estate investment companies.
2. Benefit from the proportional deduction of 20% mentioned in the first paragraph of I, sums, values or annuities from contracts defined in 1 of this I bis and which are invested in particular:
1° In securities and rights mentioned in d and e of the same 1 and contributing to the financing of social or intermediate housing in accordance with terms defined by decree in the Conseil d'Etat;
2° Or in securities of collective investment undertakings mentioned in a to c of the said 1 whose assets are made up in particular of:
a) Units in venture capital mutual funds or professional investment funds or free partnership companies that meet the conditions set out in II of article 163 quinquies B of this code, innovation mutual funds mentioned in article L. 214-30 of the Monetary and Financial Code, local investment funds mentioned in article L. 214-31 of the same code and shares in venture capital companies, which meet the conditions laid down in Article 1-1 of the loi n° 85-695 du 11 July 1985 portant diverses dispositions d'ordre économique et financier, ou d'un organisme similaire d'un Etat membre de l'Union européenne ou d'un Etat partie à l'accord sur l'Espace économique européen ayant conclu avec la France une convention d'assistance administrative en vue de lutter contre la fraude et l'évasion fiscales ;
b) Shares or units issued by companies carrying on an activity mentioned in article 34 of this code which, on the one hand, employ fewer than 5,000 people and which, on the other hand, have an annual turnover not exceeding 1,500 million euros or a balance sheet total not exceeding 2,000 million euros, provided that the policyholder of the contract, his/her spouse and their ascendants and descendants do not together hold, during the term of the contract, directly or indirectly, more than 25% of the rights in the profits of the company or have not held such a holding at any time during the five years prior to taking out the contract ;
c) Assets from the social and solidarity economy meeting conditions defined by decree in the Conseil d'Etat.
The securities and rights referred to in b of this 2° and the securities and rights making up the assets of the bodies referred to in a and c are issued by companies which have their registered office in a Member State of the European Union or in another State party to the Agreement on the European Economic Area which has concluded an administrative assistance agreement with France to combat tax fraud and evasion, and which are subject to corporation tax under ordinary law at the standard rate or would be subject to corporation tax under the same conditions if they carried on their business in France.
A decree of the Conseil d'Etat shall determine the procedures for assessing the employee headcount, turnover and balance sheet total thresholds mentioned in the same b.
The securities mentioned in 1° and in a to c of 2° of this 2 represent at least 33% of the assets of which the units of account mentioned in 1 are made up.
3. The regulations or articles of association of the undertakings for collective investment in transferable securities and collective investment schemes mentioned in 1 provide for compliance with the investment categories set out in 2. A decree of the Conseil d'Etat shall specify the methods for calculating and assessing compliance with the investment proportions and the supporting documents to be produced by the undertakings or companies concerned.
4. When the undertakings for collective investment in transferable securities, collective investments and companies mentioned in 1 use financial futures instruments, repurchase agreements and any other temporary transaction for the sale or purchase of securities, these undertakings or companies must comply with the asset investment rules provided for in 2, calculated by including in the numerator the value of the securities eligible for these rules from which they actually receive the proceeds. A Conseil d'Etat decree specifies the calculation methods and the supporting documents to be produced by the bodies or companies concerned.
5. The contracts mentioned in this Ia may also provide that part of the premiums paid is allocated to the acquisition of rights which are expressed in units of account other than those mentioned in 1. For these contracts, the proportion of investment that must be met by the units of account mentioned in the same 1 is at least equal to the proportion provided for in 2 multiplied by the ratio that exists between the premium paid and the proportion of this premium represented by the aforementioned unit or units of account.
I ter. - The levy provided for in I is applicable to sums paid to the beneficiary by the Caisse des dépôts et consignations pursuant to articles L. 132-27-2 du code des assurancesand L. 223-25-4 du code de la mutualité, where they fall within the scope of I on the day they are deposited with the Caisse des dépôts et consignations.
II. - The levy provided for in I is payable by the beneficiary and paid to the competent public accountant by the insurance and similar organisations or, in the case provided for in I ter, by the Caisse des dépôts et consignations, within fifteen days of the end of the month during which the sums, annuities or securities of any kind owed by them were paid to the beneficiaries free of charge.
It is collected according to the same rules, under the same guarantees and the same penalties as the tax on insurance conventions provided for in articles 991 et seq.
III. - (Repealed)
