In a recent decision dated February 13, 1996, the European Court of Justice found that European law is inconsistent with the registration tax of 1.20% payable in France until October 15, 1993 on contributions in the context of a merger. This decision, which ratified several decisions by various French local courts, also affects, in consequence, the 3% registration tax applied until the same date to the capitalisation of retained earnings or provisions.
In accordance with the 1969 Directive and subsequent Directives which amended it, the proportional registration tax should have been restricted to 1% from January 1, 1972, and to 0.5% in 1976, with a total exemption applicable from 1986 onwards. According to the French Government, the scope of the registration taxes paid and liable to be reimbursed covers all mergers carried out between 1972 and 1993, and it has evaluated the total amount paid in the form of registration tax which do not comply with EC law during this period around FRF 9 billion.
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