The amount of the taxable capital gain realized at a reduced rate is the difference between the gain actually produced by the sale, net of the expenses and taxes charged on the sale itself, and the net book value corresponding to the element sold which appeared on the balance sheet at the time of the sale. However, the charges incurred for the realization of the sale which are not regarded as expenses inherent in the latter, are still considered as overall expenses as long as in return of these expenses no increase of the value of the sold product occurred.
In this respect, the French High Court has considered that the fees, paid by a company for real estate, commercial and financial surveys realised by two accounting firms in order to determine the exact value of the shares it intended to sell, were deductible charges at the rate of normal corporate income tax and not expenses incurred for this sale and to be charged on the capital gain realised (State Council, June 21, 1995, no. 132.531).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be brought about your specific circumstances. For additional information contact Claire Acard on 33/(1)/42.91.07.00 or Lionel Benant on 33/78.63.72.35 or enter text search: "ARCHIBALD ANDERSEN Profile". 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.
