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the business services sector on condition that the

companies carry out their main business activity in

Saint-Martin; this condition does not apply to call

centers;

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IT services sector: IT management and maintenance,

software design, providing internet access, hosting,

creation of on-line services...

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telecommunications;

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concessions and service concessions for local public

services, terminal operating (as part of development

of the commercial port) regardless of the nature of

the goods and their final use;

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fishing and agriculture;

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other sectors: new energies, including the production

of photovoltaic electricity; building and public sector

construction;

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personal services sector: hairdressing, body treatments...

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research and development sector, namely scientific

and technical research, whether this is basic research,

applied research or experimental development and

regardless of scope;

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various other sectors: industry; extraction; crafts.

In contrast, the sectors mentioned below are specifically

excluded from the tax incentives scheme: trade; restaurant

services (with exceptions); cafés, tobacconists and bars;

education, health and social work; banking, finance and

insurance; real estate (including property development,

property dealing activities, leasing activities); cruise

navigation ; business services for companies whose

main business activity is located outside Saint-Martin

(except call centers); leisure, sporting and cultural activi-

ties (other than those directly and principally integrated

in a hotel or tourist activity); association activities and

postal activities.

B.

MECHANISM

Amount of tax deduction

Tax deduction for direct investment is equal to the cost

of the fixed assets minus the fraction of the cost funded

by a government subsidy.

Fiscal year in which the deduction is

applied

The deduction is made on the results of the year in

which the assets are delivered or completed before

any other rebate or deduction. However, in the case of

acquisition of a building on plan or building construction,

the deduction is applied for the year in which the foun-

dations are completed.

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The tax treatment of fiscal deficit follows

Collectivité

of Saint-Martin rules of ordinary law on corporate tax: it

can be carried over to subsequent years indefinitely and

for unlimited amounts, which guarantees exemption from

corporate tax as long as accumulated profits from the

exploitation of investments do not exceed their amount.

Who applies the tax deduction

The deduction is normally applied by the business owner

who actually makes use of the investment.

However, the non-user owner can apply the deduction if

the asset is leased under certain conditions for at least

five years (or for the normal useful life of the asset if this

is lower) to a user company. The owner must surrender

to the user at least 50% of the tax advantage provided

by the deduction applied to their investment and by

offsetting the deficit from the lease of the asset and

the depreciation incurred on disposal of this asset or

securities of the leasing company.

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IMPORTANT

When it comes to leased property, the approval decision

(see § c below) may also provide an exemption for five

years for leasehold rights, for the benefit of the owning

company.

In the case of a property finance lease, it is the lessee

who applies the tax deduction.

When the investment is made through a partnership

(notably an SNC “société en nom collectif”), the deduction

is applied by each member in proportion to their share in

the profit for the year in which the investment is made.

C.

APPROVAL PROCEDURE

To be entitled to a tax deduction, investments whose

total amount per program per year exceed €500,000,

must have been given prior approval from the Executive

Council of the

Collectivité

of Saint-Martin.

21

MARCH 2015 EDITION

GENEROUS TAX INCENTIVES