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Particularly likely to benefit from this scheme are

investments in hotels, buildings and equipment, buildings

intended exclusively for the purposes of hosting exhibitions

and conferences and the equipment used for these

buildings, as well as machinery and equipment used

for manufacturing operations, processing or transport.

Acceleration coefficients used for scientific and technical

research operations are increased by 0.25 points.

6.

Allowable provisions for

depreciation

These must be justified and relate to clearly identified

accounts, inventories, securities or tangible and intan-

gible assets.

Allowable provisions include provisions for contingencies,

claims, work in progress, paid leave, etc.

7.

Low corporate tax rates:

10% or 20%

Corporate tax rates (Impôt sur les sociétés) are as follows:

uu

for large companies: standard rate of 20%

uu

for small and medium businesses (SMEs): a reduced

corporate tax rate of 10% up to €40,000 of profits and

a standard rate of 20% on the remainder

uu

for gains derived from certain intangible fees (sale,

concession, sub-concession): 10% (see example on

intellectual property management companies)

uu

for gains derived from financial securities giving access

to capital: 10% (see page 17).

8.

Losses can be carried

forward indefinitely

Losses recorded during a given year may be carried

forward indefinitely and for unlimited amounts against

future profits.

In addition to this very generous scheme, there is an

optional carry-back scheme that allows the current

year’s losses to be offset against taxable income in the

previous three years. This results in a claim against the

collectivité

treasury for previously paid corporate tax.

This debt is repaid after 5 years if the company fails to

deduct it from their corporate tax bills in subsequent

years.

Finally, the net taxable income at the reduced rate of

10% may optionally be used to offset the deficit for

the year and carry-forwards (subject to the standard

rate of 20%): deficits canceled in this way cease to be

carried forward. This compensation, which operates euro

for euro, is good for businesses that do not generate

sufficient taxable profits at the rate of 20% to be able

to offset their fiscal deficits.

(1)

Intended for SMEs that have at least 75% of their shares held directly or

indirectly by individuals, or for companies that satisfy the same conditions

and report an annual turnover of less than €7,630,000, subject to having

fully paid up share capital.

14

BUSINESS TAXATION

DOING BUSINESS IN SAINT-MARTIN