French General Tax Code
In force1. The following are exempt from corporation tax:
1° (provisions no longer applicable);
1° bis. Professional trade unions, whatever their legal form, and their unions for their activities relating to the study and defence of the rights and collective material or moral interests of their members or the persons they represent and provided that they operate in accordance with the provisions governing them;
2° Except for transactions carried out with non members and provided that they operate in accordance with the provisions governing them:
a. Agricultural cooperative supply and purchasing companies;
b. Unions of agricultural cooperative supply and purchasing companies;
2° bis. (Repealed);
3° Provided they operate in accordance with the provisions governing them, cooperative companies for the production, processing, conservation and sale of agricultural products and unions of cooperative companies for the production, processing, conservation and sale of agricultural products, except for the operations designated below:
a. Sales made in a retail shop separate from their main establishment;
b. Processing operations involving products or by-products other than those intended for human or animal consumption or which may be used as raw materials in agriculture or industry;
c. Transactions carried out by the cooperative companies or unions referred to above with non-members.
This exemption applies to transactions carried out by cereal cooperatives and their unions with the Etablissement national des produits de l'agriculture et de la mer (FranceAgriMer) relating to the purchase, sale, processing or transport of cereals; the same applies to transactions carried out by cereal cooperatives with other cereal cooperatives under programmes drawn up by the establishment or with its authorisation.
Sociétés coopératives agricoles and their unions are required to produce, at the request of the administration, their accounts and the necessary evidence to prove that they operate in accordance with the legislative and regulatory provisions relating to the legal status of agricultural cooperation;
3° bis. When they operate in accordance with the provisions of loi n° 83-657 du 20 juillet 1983 relative au développement de certaines activités d'économie sociale, les coopératives artisanales et leurs unions, les coopératives d'entreprises de transports, les coopératives artisanales de transport fluvial ainsi que les coopératives maritimes et leurs unions, visées aux articles L. 931-5 to L. 931-27 of the Rural and Maritime Fishing Code, except for business carried out with nonmembers;
4° The low-income housing organisations mentioned in article L. 411-2 of the Construction and Housing Code, semi-public companies referred to in l'article L. 481-1 of the same code and the sociétés anonymes de coordination entre les organismes d'habitations à loyer modéré mentioned in l'article L. 423-1-1 of the same code for:
a. - operations carried out under the general interest service defined in the ninth to thirteenth paragraphs of article L. 411-2 of the same code as well as proceeds from the sale of energy saving certificates mentioned in article L. 221-7 of the Energy Code;
b. - income generated by the ancillary and accessory premises of housing estates mentioned in article L. 411-1 of the Construction and Housing Code, provided that these premises are necessary to the economic and social life of these estates;
c. - financial income from the investment of the cash of these bodies.
The fraction of the profit from activities other than those referred to in the previous paragraphs is subject to corporation tax;
For the application of the provisions of the first paragraph of the first paragraph of Article 221 bis, the second condition mentioned in that paragraph is not required of companies that totally or partially cease to be subject to the rate provided for in the second paragraph of I of Article 219 as a result of the provisions of this 4°. The provisions of article 111 bis do not apply to these same companies.
The provisions of this 4° apply to financial years ending on or after 1 January 2006.
However, the bodies and companies mentioned in the first paragraph may opt for the early application of these provisions to financial years ending on or after 1 January 2005. This option is irrevocable.
4° bis. (repealed);
4° ter. (provisions no longer applicable)
4° quater Social economy unions whose de jure or de facto directors are not remunerated, for:
a. The activities mentioned in Article L. 365-1 of the Code de la construction et de l'habitation for which social economy unions are subject to the approvals provided for in articles L. 365-2 to L. 365-4 of the same code when they fall within the scope of the service of general interest defined in the ninth and eleventh paragraphs of article L. 411-2 of the same code, as well as services ancillary to these activities;
b. income generated by the ancillary and accessory premises of housing complexes mentioned in article L. 411-1 of the same code, provided that these premises are necessary to the economic and social life of these complexes;
c. financial income from the investment of the cash of these bodies;
5° Profits made by non-profit associations governed by the loi du 1er juillet 1901 organising, with the support of communes or départements, fairs, exhibitions, sports meetings and other public events, corresponding to the purpose defined by their articles of association and presenting, from an economic point of view, a definite interest for the commune or region;
5° bis. The not-for-profit organisations mentioned in 1° of 7 of article 261, for transactions in respect of which they are exempt from value added tax ;
6° The regions and inter-regional agreements, the départements and inter-departmental agreements, the communes, public establishments for inter-communal cooperation with their own tax status, syndicates of communes and mixed syndicates made up exclusively of territorial authorities or groupings of such authorities as well as their public service boards;
6° bis. (Repealed)
7° Cooperative building societies that carry out, on a non-profit basis, the subdivision and sale of land belonging to them. This exemption is also applicable under the same conditions to semi-public companies whose articles of association comply with the standard clauses appended to decree no. 69-295 of 24 March 1969, as well as to so-called "Beaver" groups whose members make labour contributions;
8° The cooperative building societies designated in l'article 1378 sexies.
9° Public research establishments and public higher education establishments;
10° Legal entities created for the management of a research and higher education cluster or a thematic advanced research network and communities of universities and establishments;
11° Foundations recognised as being in the public interest in the research sector, including scientific cooperation foundations ;
12° Profits, unrealised capital gains and profits that would result from the transformation of the société de gestion du patrimoine immobilier des houillères du bassin du Nord et du Pas-de-Calais into a société anonyme d'habitations à loyer modéré, for housing that will be approved for personalised housing assistance as part of the transformation;
13° Consular higher education establishments mentioned in Article L. 711-17 of the French Commercial Code for their initial and continuing vocational training and research activities, as well as the bodies mentioned in the first paragraph of 1 bis of Article 206 of this code, in respect of their shareholding in these establishments or in respect of the financing of their activities.
The exemptions enjoyed by the legal entities referred to in 9°, 10° and 11° apply to income derived from activities conducted as part of the public service missions of higher education and research defined in articles L. 123-3 of the Education Code and L. 112-1 of the Research Code.
14° Provided that it operates in accordance with the provisions governing it, the company mentioned in Article L. 313-19 of the Construction and Housing Code for:
a) Transactions, including the credit transactions referred to in the second and fourth paragraphs of a of 2° of I of Article L. 313-19-1 of the French Construction and Housing Code, carried out as a service of general interest as defined in the ninth to thirteenth paragraphs of Article L. 411-2 of the same code;
b) Operations falling within the employment categories mentioned in d to g of article L. 313-3 of the Construction and Housing Code;
c) The operations mentioned in c and d of 2° of I of Article L. 313-19-1 of the French Construction and Housing Code;
d) Financing operations for the fund mentioned in Article L. 811-1 of the French Construction and Housing Code;
15° Provided that it operates in accordance with the provisions governing it, the company mentioned in Article L. 313-20 of the Construction and Housing Code for:
a) The subsidies mentioned in c of 2° of I of Article L. 313-19-1 of the same code intended for the acquisition or subscription by it of holdings in companies mentioned in 1° and 2° of Article L. 313-20-1 of this code;
b) The share of profits from activities carried out under the general interest service defined in the ninth to thirteenth paragraphs of article L. 411-2 of the construction and housing code by companies taxed under the conditions of article 8.
16° (Repealed)
17° Territorial professional health communities whose health project is validated under the conditions provided for in Article L. 1434-12 of the Public Health Code, for their resources received in respect of their public service missions pursuant to the agreement provided for in Article L. 1434-12-2 of the same code.
1 bis. When cooperative societies or their unions issue cooperative investment certificates, the exemption referred to in 1 is not applicable to the fraction of the results corresponding to the share of the nominal amount of the cooperative certificates in the share capital.
Results are determined in accordance with the rules laid down by Article 209, before deduction of rebates.
1 ter. For sociétés coopératives and their unions other than those mentioned in 2° and 3° of 1 or other than those covered by 4° of the same 1, the exemption provided for in 1 is limited to the fraction of the profits calculated in proportion to the cooperative members' rights in the capital when the non-cooperative members hold at least 20% of the capital and their shares may give rise to remuneration.
The profits are determined in accordance with the rules referred to in article 209 before deduction of rebates.
1 quater. For cooperative societies and their unions other than those mentioned in 4° of 1, the exemption provided for in 1 does not apply when non-cooperative members and holders of cooperative investment certificates hold more than 50% of the capital and their shares may give rise to remuneration.
1 quinquies. For the application of the provisions of 1 ter and 1 quater, natural or legal persons who do not intend to use the services of the cooperative or whose work is not used by the cooperative, but who intend to contribute by contributing capital to the achievement of the objectives of the cooperative, are considered as non-cooperating members.
2. (Repealed).
3. (Repealed).
