A Dutch company, which had benefited from the contribution of a building located in France, intended to rely on Article 808 A-I of the French Tax Code restricting the application of the duty on contributions to cases where the company benefiting from the contribution has its effective place of management in France or has its registered office in France, if its effective place of management is situated outside the European Union. The Supreme Court, in a decision dated May 21, 1996, held that, pursuant to Articles 10 and 12-1-b of the Directive of July 17, 1969 concerning indirect taxation on the raising of capital, Member States retain the power to apply transfer duties to contributions of real property, including contributions to companies whose registered office is located in another Member State. Consequently, in the Court's view, Article 808 A-I of the French Tax Code does not preclude application of Article 809-I-3 of the French Tax Code, which provides for a special duty on contributions of real property made to a legal entity subject to corporate income tax by an individual - or an entity - not subject to corporate income tax.
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