Restructuration - Successive Exchange of Shares

Some specifications were recently provided by the Tax Authorities concerning the exchange of shares and the spin-off (answer to a written question of the Ministry of the Budget, to a Member of Parliament, July 31, 1995).

Article 38-7 bis of the French General Tax Code provides that the profit realized for an exchange of social rights resulting from the spin-off of a company benefiting from the tax regime provided for by Article 210 B of the latter Tax Code may be included in the result of the tax year during which the sale of shares received in exchange occurred. In this case, the possible profit resulting from the latter sale of shares may be determined depending on the value that the social rights received at the time of the exchange had from a tax standpoint.