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A joint venture is an association between two partners in order to develop a business.
This association may take different forms in France, such as partnership, joint stock company (SA, SAS), secret partnership or convention of association.
The tax regime depends on the form adopted.
The most common form for a joint venture in France is the silent partnership (societe en participation).
General and limited partnerships are not automatically subject to corporation tax. The partners are normally subject to income tax on their share of partnership income unless an election has been made to become subject to corporation tax. If such an election has been made, the partners (including the individuals) are no longer taxable on their shares of partnership income. Partnerships limited by shares are subject to corporate income tax.
Non-profit associations are subject to corporate tax on income derived from profit-making activities to the extent that such earnings are not exempt by law. Corporate tax is levied at a reduced 24% rate on income from certain assets, such as rent from a building owned by the association. Certain securities income is subject to corporate tax at a reduced 10% rate.
The status of foreign legal entities that have a taxable presence in France is determined according to French rules.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. For additional information contact Pierre Knoepfler on +33 (1) 46 93 70 00.
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