February 1, 2019
From France: The Finance Law 2019 - Contribution and Sale: Changes to the Conditions Governing the Reinvestment of Sale Proceeds
A contribution of securities to a holding company by a natural person or through an intermediary (where the contribution is made to a company liable for corporation tax controlled by the contributing party) may benefit from deferral of taxation in accordance with Article 150-0 B ter of the General Tax Code.
In order to ensure that it is ultimately entitled to such a deferral of taxation, the holding company receiving the contribution must:
- retain the securities received as consideration for the contribution for a period of three years from the date of the contribution; or
- reinvest the proceeds of any sale of the contributed securities in an economic activity within a period of two years from the date of the sale.
In light of this fact, Finance Law No. 2018-1317 of December 28, 2018 for the 2019 year made certain changes to the conditions governing the reinvestment of sale proceeds, seeking other items to extend the scope of the definition of reinvestment, in order to offer more investment opportunities to company managers.
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