Question 40906 — taxes and duties

Summary

Mr. Florian Bachelier draws the attention of the Minister Delegate to the Minister of the Economy, Finance and Recovery, responsible for public accounts, to the risk of interpretation not in accordance with the objective of the legislator with regard to the so-called “contribution-transfer” mechanism governed since November 2012 by article 150-0 B ter of the general tax code (hereinafter CGI). The contribution-transfer is an operation consisting of bringing the securities of a company to an ad hoc holding company, which then sells them. The operation generates a temporal shift in the taxation of the capital gain on the contribution of the securities. This tax deferral can be maintained when the securities are subsequently sold by the holding company, subject to compliance with the conditions provided for in article 150-0 B ter of the CGI. This system, which suspends taxation until a later event, allows the proceeds of the tax to be reinvested. transfer not deducted from the taxation of the contribution transaction. This is also the essential condition for maintaining the tax deferral: a certain percentage of the sale proceeds must be reinvested in the economy, the typology of reinvestments being listed in the text (currently 60%). Concerning an anti-abuse legislative text, article 150-0 B ter of the CGI must be interpreted strictly, especially when the economic reinvestment is made in good faith. However, it happens that the tax administration contests the legal organization of reinvestment and reconsiders the tax deferral of the capital gain provided for by this text. Indeed, the tax deferral may be called into question on the grounds that the condition of economic reinvestment of at least 60% of the proceeds of the sale (50% before 2019) is not satisfied. It is for example the case for the concomitant acquisition of the shares of an operating company, on the one hand, and, on the other hand, of the building essential to the activity and rented exclusively to this company under a commercial lease. In such a configuration, which depends on the legal organization of the seller, the tax administration considers rental as a civil property activity not eligible for the system. Administration tax then calls into question the tax deferral even though the acquisition of the building is essential to the continued operation of the commercial activity taken over and the rental of it is entirely dedicated to this activity. However, such reinvestment does not have a heritage character. Indeed, with regard to the acquisition of real estate essential to the continued operation of the activity commercial takeover and entirely dedicated to this activity, the reinvestment is indeed of an economic nature within the meaning of article 150-0 B ter of the CGI. Moreover, if the holding company acquires a business and the premises necessary for operations, the reinvestment is eligible (BOI-RPPM-PVBMI-30-10-60 §295s.). The same applies if an operating company holding the premises is bought (ibid.). This difference in treatment, inherent to the legal organization of the seller, does not appear justified. The purchase of the essential building entirely dedicated to the operation of the activity held by the holding company should also be recognized as eligible for economic reinvestment provided for by article 150-0 B ter of the CGI, regardless of the legal organization. Such an interpretation has consequences that could be detrimental for the taxpayer concerned, especially if it lacks the liquidity to face the tax: the contribution of the securities to the holding company does not generate liquidity for the contributing taxpayer, which is what explains the implementation of the tax deferral on the capital gain on the contribution. In fact, the transfer price of the securities is received not by the contributing taxpayer but by the holding company, which reinvested it. The result therefore puts the taxpayer in great difficulty, but also the companies and jobs attached to it. He therefore asks him what measures should be taken to avoid such situations.

Machine translation from French. The official text remains authoritative.

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