French General Tax Code
In forceThe overall net long-term capital gain or loss is determined by the parent company by making the algebraic sum of the net long-term capital gains or losses of each of the companies in the group, determined and taxable in accordance with the procedures set out in articles 39 duodecies to 39 quindecies.
The provisions of article 39 quindecies are applicable to the overall net long-term capital gain and loss.
The overall net long-term capital gain is subject to separate taxation under the conditions provided for in a bis of I of article 219.
The amount net of tax of the overall net long-term capital gain must be included, in the parent company's balance sheet, in the special reserve provided for in Article 209 quater.
Inclusion in this special reserve ceases for capital gains taxed in respect of financial years commencing on or after 1 January 2004.
The amount of additional allocations to provisions set aside by a company after it joined the group in respect of holdings in other group companies is added to the overall net long-term capital gain or deducted from the overall net long-term capital loss. The amount of additional allocations to provisions made by a company after it joined the group in respect of holdings in intermediate companies, foreign companies or a non-resident parent entity, with the exception of the fraction of these allocations for which the parent company provides proof that it is not linked, directly or indirectly, to the losses and net long-term capital losses of companies in the group used to determine the overall result and the overall net long-term capital gain or loss, is added to the overall net long-term capital gain or deducted from the overall net long-term capital loss. In the event of a disposal between group companies of securities eligible for the long-term capital gains or losses regime, the provisions for depreciation of these securities made after the disposal are also added to the overall net long-term capital gain or deducted from the overall net long-term capital loss, up to the amount by which the capital gains or profits exceed the capital losses or losses relating to these same securities, which has not been taken into account, pursuant to the first paragraph of Article 223 F, for the calculation of the overall result or net long-term capital gain or loss. Where, pursuant to the second paragraph of Article 223 F, the parent company includes in the overall net long-term capital gain or loss the capital gain or loss not taken into account when it was realised, the fraction of the provision which has not been retained pursuant to the second sentence of this paragraph, nor brought back pursuant to the sixteenth paragraph of 5° of 1 of l'article 39, is, depending on the case, deducted from the overall net long-term capital gain or added to the overall net long-term capital loss. The amount of provisions reported in application of the first sentence of the sixteenth paragraph of 5° of 1 of Article 39 which correspond to additional allowances not retained in application of this paragraph is deducted from the overall net long-term capital gain or added to the overall net long-term capital loss if the companies referred to in the first and third sentences of this paragraph or held, directly or indirectly, by the intermediary companies, by the foreign companies or by the non-resident parent entity mentioned in the second sentence of the same paragraph are members of the group or, in the case of the provisions mentioned in the first and second sentences, of the same group created or enlarged under the conditions set out in c, d, e, f, g, h, i or j of Article 6 of 223 L in respect of the financial year during which the provisions are reported.
