The purpose of this article is to summarize the reporting obligations incumbent upon you when you take advantage of the tax deferral permitted by the provisions of article 150-0 b ter of the CGI (the “ CGI ").
If you need clarification regarding article 150-0 b ter of the CGI, we invite you to consult our reminder concerning the essential information to remember about article 150-0 b ter of the CGI.
I. Your reporting obligations in the year of the contribution
The declaration of obligations for the year of contribution is defined by certain tax rules. According to these rules, if all the conditions are met, the added value realized during the contribution can benefit from an automatic tax deferral.
The declaration of this capital gain must be made using form no. 2074-I, which must be attached to annual declaration no. 2074.
You must defer the amount of immediately taxable capital gain due to the amount of money you received on declaration no. 2074, as well as on general income declaration no. 2042.
You must also carry forward the amount of the capital gain benefiting from the tax deferral on income tax return no. 2042, on line 8UT, as well as on supplementary income tax return no. 2042 C.
You must be able to provide the tax administration with a certificate issued by the company benefiting from the contribution (the holding company), indicating that it is informed of the existence of a deferred capital gain in application of specific tax rules.
If you reside outside France for tax purposes, you must file declaration no. 2074-NR within the month following the date of the contribution transaction.
You can find declaration forms No. 2042, No. 2042 C, No. 2074, No. 2074-I and No. 2074-NR on the website www.impots.gouv.fr.
II. Your reporting obligations in the years following the contribution and when the tax deferral expires
Each year, you must indicate in your income tax return no. 2042, on line 8UT, the total amount of capital gains subject to tax deferral. This therefore includes the capital gain for which taxation has been deferred under article 150-0 B ter of the CGI.
When an event brings partially or totally end the tax deferral from which you benefit, you must mention the amount of the capital gain for which the deferral ends:
- in your tax return for the year in which the deferral expires;
et
- in the declaration of gains from the transfer of securities and social rights no. 2074.
Furthermore, you must complete the monitoring report for deferred capital gains appearing on declaration no. 2074-I which is annexed to the special declaration of gains from the transfer of securities and social rights.
If the company benefiting from your contribution transfers, repurchases, reimburses or cancels the securities contributed within three years following the contribution, you must declare it in the tracking status, even if it undertakes to reinvest the proceeds from the sale of the securities contributed within two years.
III. The reporting obligations for the company benefiting from your contribution
If the company benefiting from your contribution transfers, repurchases, reimburses or cancels the securities contributed within 3 years following the date of the contribution, it must mention the following information on a certificate attached to its declaration of results for the year:
- The nature and date of the event which affected the securities contributed;
- The number of securities affected and their sale price;
- The commitment to reinvest within two years at least 60% of the proceeds from the sale of the securities concerned in an eligible activity.
If the company has not committed to reinvest or has not respected the commitment it has made, it must attach a certificate specifying that the condition has not been met to its declaration of results for the year of non-compliance with the reinvestment condition.
If the commitment has been respected, it must attach to its declaration of results for the year of reinvestment a certificate mentioning the following information:
- The amount of sale proceeds reinvested;
- The nature and date of the reinvestment commitment;
- If applicable, the name, category and form of the company, fund or organization benefiting from the reinvestment commitment, as well as the address of its head office.
In the event that the holding company benefiting from your contribution has made a commitment to reinvest the proceeds of sale in an FPCI, an FCPR, an SLP or in an SCR, the structure concerned is required to provide it with a certificate within the following month the expiration of the period of five years from its subscription commitment.
The certificate must indicate whether, on that date, the vehicle meets or does not meet the condition relating to investment quotas in eligible securities required. It must also specify the percentages of the vehicle's assets made up of these securities..
Indeed, during the 5-year period the investment conditions, necessary to benefit from the tax deferral, must have been respected.
A copy of each of the 3 certificates mentioned above must be sent to you by the vehicle benefiting from your commitment.
If you would like more information on the regime of article 150-0 b ter of the CGI you can contact us, we will be delighted to provide an answer to your questions.
NB: Before making any investment decision and in order to correctly assess the tax regime described in this document as well as the risks incurred by this type of investment, it is recommended to consult your usual legal, tax or financial advisor and to contact the management company for more information.
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