Contribution-Transfer: What Do You Need To Do To Make Your Investment A Success?

For one reason or another, you may, as a shareholder, business manager or partner, want to sell the securities and shares you hold in a company. However, it is useful to know that taxation is never far away. The contribution-assignment system allows you to benefit from a slight reduction in the tax burden and to reinvest your capital. How ? To find out, read this guide.  The contribution-assignment consists of bringing the securities of one company (holding) to another in order to benefit from the capital gains tax deferral regime. In other words, it is a mechanism that allows you as a business manager or shareholder to optimize taxation when selling your company’s shares. This maneuver is enshrined in article 150-0 B Ter of the General Tax Code .

As a reminder, the objective of the contribution-transfer remains the deferral of taxation or a definitive tax exemption. To benefit from this tax system which prevents the immediate deduction of tax on the capital gain resulting from the sale of securities, a certain number of conditions must be met. Contribution-transfer: formal framework of the operation The first of the conditions for the validity of the tax deferral remains the framework in which the contribution-transfer was carried out. Indeed, for its compliance with the rules in force, you must make the contribution and the transfer in France or in a Member State of the European Union. However, it is possible that the operation is out outside this framework. When this is the case, it is mandatory that the State or territory in which the transactions took place have concluded a tax treaty with

When Does The Tax Deferral Expire?

France which includes an administrative assistance clause . A clause whose purpose would be to fight against Philippines Phone Number List  tax evasion and fraud . The tax regime of the company receiving the contribution The second major condition for obtaining a tax deferral under the principles governed by the CGI relates to the tax regime of the beneficiary company . In practice, the company receiving the contribution will have to be subject to corporation tax or an equivalent regime. Control of the contributor over the beneficiary company At this level, it is required that the person making the transfer be the manager or owner of the beneficiary company . This is a condition that is assessed on the date of the transaction and on the basis of the rights held by the taxpayer at the end of the transaction.

Philippines Phone Number List

Either, it can be your spouse, your ascendants or descendants.  Who directly or indirectly hold the majority of the voting rights. The rights related to the social benefits of the company. Percentage in case of balance payment In case you have planned the payment of a balance. A percentage is into account. In fact, the amount of said payment must not exceed 10%. Of the nominal value of the securities received in exchange for the contribution. To this end, it should  that the capital gains tax must take into account the year of the contribution in proportion to the amount of the balance. Contribution-transfer: what are the conditions for reinvestment? Apart from the conditions for validation of the tax deferral , it is useful to specify that the beneficiary holding company is keep the securities for at least 3 years.

Contribution-Transfer: The Procedures Related To The Declaration Of The Tax Deferral

But in the event that it wishes to sell them before the end of this period. Certain provisions are applicable in order to maintain the deferred taxation of the capital gain carried forward.  It is : Reinvest within 2 years, approximately 60%.  Of the proceeds of the transfer in an eligible activity or rather.  In the acquisition of securities of a company whose tax regime is corporate income tax. Hold the reinvestment for a minimum of 2 years before any disposal. How to reinvest to retain the right to tax deferral? To benefit from the capital gains tax deferral. The reuse of proceeds from the sale out in an eligible activity. To do this, you have the possibility of reinvesting your capital in three forms, namely.

It is important experts at all levels and even more so at this stage. As you will have understood, the reuse sale proceeds is a complex operation.  Which requires a perfect mastery of the different contours. To benefit from better reinvestment solutions, you can, for example, subscribe to the contribution-cession mandate of Inter-invest . They will provide you with a specialist who will help you determine. The best way to invest while respecting the regulatory framework defined by the CGI. Direct investment in a compliant activity. When the company benefiting from a tax deferral wishes to sell the securities. Thus, the proceeds of the sale to finance activities in the sector:

Leave a comment

Your email address will not be published.