Capital gains on the disposal of equity holdings: calculation of the proportion of fees and charges

Administrative Supreme Court Decision, June 14, 2017

For accounting periods ending on or after 31 December 2012, the 12% portion of fees and charges is assessed on the gross amount of capital gains in accordance with CGI Article 219, I-a quinquies 2nd indent.

The tax authorities’ policy published is other guidelineBOI-IS-BASE-20-20-10-20-20150401” (para 125) specifies that this proportion of fees is “taxable”, “irrespective of the net capital gain made or capital loss suffered on the disposal of eligible securities”.

This administrative position was censored by the Administrative Supreme Court which considered that its results from the provisions of the article 219 I a quinquies of the French Tax Code, enlightened by the parliamentary records that the exclusion from the exemption should not apply unless a net capital gain was realized during the relevant fiscal year.

Taxpayers which have calculated the proportion of fees and charges on the gross amount of capital gains despite having suffered a net capital loss for FY 2014, 2015 and 2016 should submit their claims now to obtain the repayment of the Corporate tax unduly paid, and in any case by the deadline of 31 December 2017 for FY ended on 31 December 2014 (corporate tax paid in 2015).

The success of claiming back the corporate tax paid is 100%.

Michel Guichard

Michel Guichard, Partner, leads the Indirect Tax activity. With more than 30 years’ experience in International and French Tax law, he advises his clients on indirect tax matters. Michel is […]