French General Tax Code
In force1. The companies and groupings mentioned in 3 of article 206 may opt, under conditions which are set by ministerial order, for the system applicable to capital companies. In this case, the income tax due by the partners in name, general partners, co-participants, the sole partner of a limited liability company and the partners of agricultural holdings is established in accordance with the rules set out in the articles 62 and 162.
The option must be notified before the end of the third month of the financial year in respect of which the company wishes to be subject to corporation tax for the first time. However, in the event of the transformation of a capital company into one of the forms of company mentioned in 3 of article 206 or in the event of the reunification of all the shares of a limited liability company in the hands of a natural person, the option may be notified before the end of the third month following this transformation or reunification to take effect on the same date as the latter.
The companies and groupings referred to in the first paragraph of this 1 that wish to waive their option for the capital company regime shall notify the administration of their choice before the end of the month preceding the deadline for payment of the first instalment of corporation tax for the financial year in respect of which the waiver of the option applies. If the option is waived, companies and groupings may not opt again for the capital company regime. In the absence of a waiver before the end of the month preceding the deadline for payment of the first instalment of corporation tax for the fifth financial year following that in respect of which the option was exercised, the option becomes irrevocable.
The provisions of this 1 do not apply:
a. to co-ownership property companies referred to in article 1655 ter ;
b. to partnerships resulting from the conversion of capital companies that took place less than fifteen years ago where they did not exercise the option at the time of this conversion, within the period mentioned in the second paragraph;
c. to the non-trading companies mentioned in articles 238 ter, 239 ter, 239 quater A and 239 septies.
2. (Obsolete provision).
3. Partnerships which opted before 1st January 1981 for taxation according to the tax regime for capital companies mentioned in 1 and which carry on an industrial, commercial or craft activity may renounce their option if they are formed between persons related in the direct line or between brothers and sisters, as well as spouses. The waiver may only be made with the agreement of all the partners.
