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Details on the concept of French and foreign companies:
For the collection of transfer duties for consideration on the transfer of social rights, French companies are those whose registered office is located in France (see basic administrative doctrine (DB) 7 D 5 § 12). Conversely, all companies whose head office is not located in France are considered foreign.
Details on the notion of listed shares:
Listed shares, as specified in I of article 726 of the CGI, are those that are traded on a regulated market in financial instruments within the meaning of article L. 421- 1 of the Monetary and Financial Code or on a multilateral trading facility within the meaning of Article L. 424-1 of the same code.
Clarifications on the notion of deed:
The deed, within the meaning of article 726 I-1° of the CGI, means any writing forming a title with regard to each of the parties, whatever its form.
With regard to the sale of shares in listed companies, the taxable event is the execution of the deed (article 635-7° of the CGI). In the absence of an act, there is therefore no taxation. This is particularly the case for transactions carried out on the market which are always outside the scope of registration fees.
With regard to the sale of shares in unlisted companies, the triggering event consists of the sale or execution of the deed if there is one (article 635-7° and 639 of the CGI).
Details relating to the scope:
The transfer of shares must be understood stricto sensu. Thus, transactions that are not related to assignments are outside the scope of the tax (case of collateral deposits without transfer of ownership, equity derivative contracts).
The same applies to securities lending-borrowing transactions referred to in Articles L.211-22 et seq. of the Monetary and Financial Code (CMF) as well as pledges of securities authorized by Articles L.211-38 et seq. of the CMF.
In addition, the terms of exemption for deeds transferring company shares (listed and unlisted) were significantly broadened by the 2012 finance law.
Exemptions already applicable.
Before the adoption of the finance law for 2012, certain transactions were already exempt:
– transfers of corporate rights carried out free of charge;
– repurchase agreements, which are defined as contracts by which an institutional investor or a company can exchange, for a fixed period, its cash for financial securities. These transactions are exempt from registration fees pursuant to the provisions of Article 12 of Law No. 93-1444 of December 31, 1993 containing various provisions relating to the Banque de France, insurance, credit and markets. financial. This exemption is also applicable to repurchase transactions under foreign law with characteristics equivalent to those mentioned above.
In this regard, the administrative instruction published in the official tax bulletin (BOI) 7 D-2-00 defines a repurchase agreement as the operation by which a legal entity, a mutual fund or a mutual debt fund cedes in full property to another legal person, a common fund or a common debt fund, for an agreed price, securities, titles or effects and by which the assignor and the assignee undertake respectively and irrevocably, the first to take back the securities or bills, the second to sell them back for an agreed price and date.
– dividend payment transactions in securities. Indeed, the basic administrative doctrine (DB) 7 D 5112 § 7 specifies that the payment of dividends, pursuant to Article L. 232-12 of the Commercial Code, to holders of shares in a company in the form delivery of shares held in the portfolio does not constitute a transfer of shares.
New exemptions resulting from the finance law for 2012.
The following are now exempt from registration duties:
– acquisitions of corporate rights made within the framework of the purchase of its own shares by a company or a capital increase;
– acquisitions of social rights of companies placed under safeguard proceedings or in receivership;
– acquisitions of corporate rights when the transferring company is a member of the same group, within the meaning of Article 223 A, as the company acquiring them;
– transactions falling within the scope of article 210 B of the CGI.
Details relating to territoriality:
Law no. 2011-1977 of December 28, 2011 on finance for 2012 broadened the rules of territoriality applicable to the sale of shares in listed or unlisted companies.
Thus, are now subject to registration fees in France, deeds passed abroad relating to the transfer of shares, founders’ shares or profit shares of listed or unlisted companies having their registered office in France. Correlatively, these operations are only taxable if they fall within the scope of the tax and are not carried out in cases similar to those giving the right to exemption.
Apart from this modification, the previous rules of territoriality and scope remain applicable.
Thus the transfers of shares of listed companies are only taxable if they are recorded by a deed. Conversely, transfers of shares in listed companies not recorded by a deed remain outside the scope of application of registration fees, whether the company is a French company or a foreign company.
On the other hand, transfers of shares of unlisted companies (which do not meet the criteria of a legal entity with a preponderance of real estate) not recorded by a deed remain subject to registration fees in the case of French companies.
In addition, deeds transferring shares of listed or unlisted companies entered into in France are subject to registration fees, whether they concern French companies or foreign companies (article 718 of the CGI).
