French General Tax Code
In forceIn regional aid areas and for operations carried out from 1 January 2007 until 31 December 2023, the municipalities and their public establishments for inter-municipal cooperation with their own tax status may, by means of a general decision taken under the conditions provided for in I of l'article 1639 A bis, exempt from all or part of the business property tax (cotisation foncière des entreprises) companies that carry out on their territory, either expand or create industrial or scientific and technical research activities, or management, research, engineering and IT services, or convert to the same type of activity, or take over ailing establishments carrying on the same type of activity. For companies meeting the definition of small and medium-sized enterprises, 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, the exemption applies in the case of initial investment. For companies that do not meet this definition, the exemption applies only in the case of initial investment in a new economic activity in the area concerned. In the case of extensions or creations of industrial or scientific and technical research establishments that meet the conditions set by decree, taking into account either the volume of investment and the number of jobs created, or the volume of investment alone, the exemption is granted without further formality. In other cases, it is subject to approval under the conditions set out in Article 1649 nonies.
When approval is required for small or medium-sized companies, it is granted by a decentralised procedure.
Where approval is not required, the exemption relates to the net increase in tax bases resulting from the new fixed assets assessed in relation to the last year preceding the operation or in relation to the average of the last three years, whichever is greater.
The company may only benefit from an exemption not subject to approval if it has indicated this to the tax department at the latest when filing the first return in which the new items concerned must appear.
The company declares each year the items falling within the scope of the exemption. Two exemption periods may not run concurrently.
The exemption ceases for the remaining period if during this period the company no longer meets the conditions required to obtain this exemption.
When all or part of the communal share of the business property tax paid by businesses located in an economic activity zone created or managed by a grouping of communes is allocated to this grouping under the amended article 11 of law no. 80-10 of 10 January 1980 on the adjustment of direct local taxation, the latter is substituted for the commune for the application of this article.
Notwithstanding the provisions of article L174 of the Book of Tax Procedures, any business that voluntarily ceases trading during an exemption period provided for in this article, or within five years of the end of the exemption period, is required to pay the sums it has not paid in respect of business property tax.
The benefit of the exemption is subject to compliance with Article 14 of the aforementioned Commission Regulation (EU) No 651/2014 of 17 June 2014.
A Conseil d'Etat decree sets out the conditions for application of this article.
