French General Tax Code
In force1 Corporation tax is assessed under the same conditions and subject to the same penalties as income tax (industrial and commercial profits, tax regime based on actual profits or based on the simplified regime).
2 In the event of dissolution, transformation resulting in the creation of a new legal entity, contribution to a company, merger, transfer of the registered office or an establishment to a foreign State other than a Member State of the European Union or a State party to the Agreement on the European Economic Area that has concluded with France an agreement on mutual assistance for recovery with a scope similar to that provided for in Council Directive 2010/24/EU of 16 March 2010 on mutual assistance for the recovery of claims relating to taxes, taxes, duties and other measures, corporation tax shall be assessed under the conditions set out in 1 and 3 of Article 201.
The same applies, subject to the provisions of Article 221 bis, where the companies or bodies referred to in Articles 206 to 208 quinquies, 239, 239 bis AA and 239 bis AB are wholly or partially subject to corporation tax at the rate provided for in the second paragraph of I of Article 219.
Where the transfer of assets, the registered office or an establishment takes place in another Member State of the European Union or in a State party to the Agreement on the European Economic Area which has concluded with France a mutual assistance agreement on debt collection with a scope similar to that provided for by the aforementioned Council Directive 2010/24/EU of 16 March 2010, corporation tax calculated on the basis of unrealised capital gains recorded on the fixed asset items transferred and capital gains deferred or deferred for taxation shall be paid within two months of the transfer of the assets :
a) Either for its full amount;
b) Or, at the express request of the company, for one-fifth of its amount. The balance is paid in equal instalments no later than the anniversary date of the first payment over the following four years. The balance of the fractions due pursuant to the first sentence of this b may be paid at any time, in a single instalment, before each anniversary date of the first payment.
The tax becomes immediately due and payable when, within the five-year period, the assets are sold or transferred to a State other than those mentioned in the third paragraph of this 2 or the company is dissolved. The tax also becomes due in the event of failure to comply with any of the payment deadlines.
Each year, the company sends the non-resident tax department a statement in accordance with the model provided by the administration showing the information required to monitor the unrealised capital gains on the transferred fixed asset items mentioned in the third paragraph.
2a Whether or not it is accompanied by a change in legal form, the amendment of the Articles of Association with a view to assigning to any company a purpose in accordance with the provisions of Article 1655 ter is treated, for tax purposes, as a cessation of business.
2 ter The conversion of a capital company or an association formed in accordance with loi du 1er juillet 1901 en groupement d'intérêt économique is considered as a cessation of business and results in the assessment of corporation tax under the conditions provided for in 1 and 3 of article 201.
2 quater The conversion into an open-ended investment company of a company that is not exempt from corporation tax entails the same tax consequences as the liquidation of the converted company.
3 The change of nationality of a société par actions and the transfer of its registered office abroad do not entail the application of the provisions of the first paragraph of 2, when they are decided by the general meeting under the conditions provided for in Article L. 225-97 of the Commercial Code.
4 (Obsolete provision).
5. a) A change in the corporate purpose or the actual activity of a company entails the cessation of business. The same applies in the event of the disappearance of the means of production necessary for the continuation of the business for a period of more than twelve months, except in cases of force majeure, or when this disappearance is followed by a transfer of the majority of the company's rights.
However, in the situations mentioned in the first paragraph of this a, article 221 bis is applicable, except as regards provisions the deduction of which is provided for by specific legal provisions.
b) A change in the actual activity of a company means in particular:
1°) The addition of an activity resulting, in respect of the financial year in which it occurs or the following financial year, in an increase of more than 50% compared with the financial year preceding that of the addition:
either the company's turnover;
or the average number of employees and the gross amount of the company's fixed assets;
2°) The abandonment or transfer, even partial, of one or more activities resulting, in respect of the financial year in which it occurs or the following financial year, in a decrease of more than 50% compared with the financial year preceding that of the abandonment or transfer:
either the company's turnover;
or the average number of employees and the gross amount of the company's fixed assets.
c) Upon approval issued by the Minister responsible for the budget in accordance with the procedures set out in Article 1649 nonies, are not considered to result in the cessation of business:
1°) The temporary disappearance of the means of production for a period of more than twelve months referred to in a when the interruption and the resumption are justified by principal motivations other than tax;
2°) The operations referred to in b when they are essential to the continuation of the activity at the origin of the deficits and to the continuity of the jobs.
6 When a société d'intérêt collectif agricole renounces the status defined in articles L. 531-1 to L. 535-4 of the Code rural et de la pêche maritime, the provisions of the first paragraph of 2 do not apply if this renunciation is not accompanied by a change in tax regime.
