French General Tax Code
In forceI. - In the event of a withdrawal of cash from an account defined in article L. 221-32-4 of the Monetary and Financial Code, the net gain referred to in 2 ter of II of article 150-0 A of this code is made up of the balance of the distributions referred to in 7 and 7 bis of the same II and in 1 of II of article 163 quinquies C perceived in the account as well as capital gains and losses recorded during transactions carried out in the account, retained for their gross amount before application, where applicable, of the allowances mentioned in 1 ter or 1 quater of article 150-0 D or in article 150-0 D ter as they stand on the date of receipt or realisation of said distributions or capital gains. When this net gain is greater than the amount of the withdrawal, it is retained up to the limit of this amount and the balance remains taxable in the account.
However, for the determination of the net gain mentioned in the first paragraph, no account is taken of the same distributions and capital gains and losses when they are received or realised under the conditions provided for in 1 or 1 bis of III of article 150-0 A, in article 163 quinquies B or 2 of II of article 163 quinquies C.
The capital gains and capital losses mentioned in the first paragraph of this I are determined in accordance with article 150-0 D.
However, by way of derogation from 11 of the same article 150-0 D, capital losses may be offset, without any time limit, first against the capital gains of the earliest prior years and then against the capital gains of the current year and subsequent years relating to securities subscribed on the earliest dates.
In the event of a positive balance, the net gain mentioned in the first paragraph, for which taxation is established, is, where applicable, reduced by the allowances mentioned in 1 ter or 1 quater of the same article 150-0 D or in article 150-0 D ter under the conditions provided for by these same articles in their wording in force on the date of receipt or realisation of the said distributions or capital gains. For the application of these allowances, the net gain is broken down between the different allowance rates according to the same breakdown as all the capital gains recorded in the account on the day of withdrawal before deducting capital losses.
When the net gain referred to in the fifth paragraph is taxed under the conditions provided for in 1 of article 200 A, the allowances referred to in 1 ter or 1 quater of article 150-0 D are not applied.
In the event of a negative balance, the cash withdrawn is not taxable. The capital losses realised in the account, for their amount exceeding the capital gains realised under the same conditions on the date of withdrawal, remain chargeable to the account, under the conditions provided for in this I.
II. - In the event of the withdrawal of securities from an account referred to in the first paragraph of I, the net gain referred to in 2 ter of II of article 150-0 A corresponds to the subscription value of the securities withdrawn.
The taxable gain is determined under the conditions provided for in I.
Where the withdrawal relates to securities contributed under the conditions provided for in article L. 221-32-5 of the Monetary and Financial Code, no tax is levied on this withdrawal.
In the event of the sale for valuable consideration or redemption of securities that have been withdrawn from the account, the net gain is determined and taxed in accordance with the ordinary law procedures set out in articles 150-0 A to 150-0 D ter and 1 or 2 of article 200 A of the present code.
III. - Closure of the account entails the withdrawal of all assets held in the account. The gain on closure is determined in accordance with the conditions set out in I and II.
Where, on the date of closure of the account, the amount determined in the first paragraph of this III is a capital loss, this is deductible from capital gains realised under the conditions set out in article 150-0 A in respect of the year of closure of the account and, where applicable, subsequent years, up to and including the tenth.
IV. - For the application of this article, the transfer by the account holder of his tax domicile outside France entails the same consequences as closing the account. In this case, Article 167 bis shall apply:
1° To capital gains realised under the conditions of I of this Article. These capital gains are taken into account for the determination of income tax, determined in accordance with II bis of article 167 bis, of the levies provided for in 1° of I of article 235 ter, in article L. 136-6 of the social security code and in article 15 of order no. 96-50 of 24 January 1996 relating to the repayment of the social debt. When the taxes due on these capital gains are placed on deferment of payment, this deferment expires under the conditions laid down for the taxation of the said capital gains in accordance with the provisions of this article for a taxpayer domiciled for tax purposes in France;
2° To unrealised capital gains recorded on the date of transfer of the tax domicile on the securities or rights registered in the account. These capital gains are taxable under the conditions of ordinary law provided for in 1 of I of article 167 bis.
