Are tax incentives regarding the recapitalisation of companies by means of capital increases limited to new shares, or can shares of which the value has been increased following a cash contribution to capital also qualify? The decision of the Conseil d'Etat (France's Supreme Administrative Court) of April 14, 1995 (req No. 135605), after examining the terms of the law prior to its codification, held that the tax incentive should apply not only to new shares but also to shares of which the value may have increased following a capital increase. Although this decision concerns laws which no longer apply (Art. 214 A of the French Tax Code which authorised the deduction of dividends from shares resulting from a capital increase), this decision could nonetheless have current application such as in the case of Article 220 sexies, which allows a tax credit in certain cases to small and medium-sized non-listed companies in the event of a capital increase.

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