An Instruction dated 12 May 1995 points out the Tax Administration's position as regards financial advantages obtained, primarily by salaried executives, using systems that give them the possibility to buy and re-sell shares, under conditions determined in advance, when the said systems are outside the legal framework of salaried shareholding. The Instruction points out that the attractive tax regime defined under Articles 80 bis and 163 bis C of the French Tax Code (capital gain taxed at a 19,4% rate and no social security charges) is applicable only if the company strictly complies with the specific provisions of the French Company Law of 24 July 1966 (articles 208-1 to 208-8-2) and with the reporting obligations of Article 91 bis of Annex II of the French Tax Code. The French Tax Administration announces it will requalify any operations outside the legal framework. At the same time, the French Senate recommends a wide reform of the French personal income tax, and especially the reduction of its highest rate from 56,8% to a proposed 40%.
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 Claire Acard on 33/(1)/55 61 10 10. The members of Archibald Andersen Association d'Avocats (S.G. Archibald and Arthur Andersen International) are registered with the Hauts-de-Seine Bar and the Lyon Bar.
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