French General Tax Code
In force1. In the event of the transfer of an industrial, commercial, craft or mining business, whether for valuable consideration or free of charge, whether a forced or voluntary sale is involved, the transferee may be made jointly and severally liable with the transferor for the payment of income tax relating to the profits made by the latter during the year or financial year of the transfer up to the day of the transfer, as well as the profits of the previous year or financial year where, the transfer having taken place within the normal declaration period, these profits have not been declared by the transferor before the date of the transfer.
However, the transferee is only liable up to the amount of the price of the business, if the transfer was made for consideration, or the value used to calculate inter vivos transfer duty, if it was made free of charge, and can only be called into question for a period of ninety days starting from the day of the declaration provided for in 1 of Article 201 if it is made within the period specified by the said paragraph, or from the last day of that period, if no declaration is made.
In the case of the sale or transfer of a business, the period referred to in the second paragraph begins to run on the day the declaration referred to in 3 and 3 bis of article 201 is filed. This period is reduced to thirty days when the following conditions are met:
a) The obligation mentioned in the second paragraph of 1 of article 201 has been complied with;
b) The transferor has filed the declaration mentioned in 3 and 3 bis of article 201 within the period stipulated in the same article 201;
c) The transferor complies, on the last day of the month preceding the sale or transfer of the business, with his tax declaration and payment obligations.
Failing this, the time limit is set at ninety days and begins to run from the expiry of the period allowed for filing the income tax return.
The provisions of this 1 apply under the same conditions as regards corporation tax and apprenticeship tax.
2. In the event of the transfer for valuable consideration of either an office or position, or a business or the right to exercise a non-commercial profession, the taxpayer's successor may be made jointly and severally liable with his predecessor for the payment of income tax relating to the profits made by the latter during the year of the transfer up to the day of the transfer as well as the profits of the previous year when, the transfer having taken place during the normal declaration period, these profits have not been declared before the date of the transfer.
However, the taxpayer's successor is only liable up to the amount of the transfer price and can only be called into question for a period of three months starting from the date of the declaration provided for in 1 of article 202, if it is made within the period specified by the said paragraph, or from the last day of that period, if no declaration is made.
The provisions of this paragraph shall apply under the same conditions as regards corporation tax.
3. The owner of a business is jointly and severally liable with the operator of that business for direct taxes assessed in respect of the operation of that business until the management lease contract is published.
The first paragraph of this 3 is only applicable when the taxes in question have been subject to the increases provided for in b or c of 1 of article 1728 or article 1729 and on condition that the owner knew or could not have been unaware of the existence of the breaches that led to the application of these increases.
4. The third parties referred to in 1 to 3 are jointly and severally liable with the taxpayers to make the payments provided for in Article 1663 B up to the fraction of these payments calculated on the corresponding contributions made chargeable to the taxpayer in the tax rolls relating to the last year in respect of which he was taxed.
5. A decree shall lay down the conditions for the application of this article (1) with regard to income tax.
