Doing business in Saint-Martin

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This approval process applies regardless of the amount
for investments in transportation, recreational boating,
agriculture, sea fishing and aquaculture, the coal and
steel industries, shipbuilding, synthetic fibers, the auto-
motive industry or the renovation and rehabilitation of
classified hotels, tourist residences and holiday villages,
or which are necessary for the operating of an industrial
or commercial local public service concession.
Approval is granted if the program presents an economic
interest for the Collectivité, if it allows the creation or
maintenance of jobs in Saint-Martin and is in line with
spatial planning and environmental policy.
D. OBLIGATION TO RETAIN
Investments made with the benefit of the tax deduc-
tion must be retained and used for the purposes of
operating the business for at least five years, or for the
normal useful life whichever is lower. Otherwise, or if
the recipient ceases trading, the amounts deducted
are reported to the taxable income of the company
that applied the deduction for the year in which this
event occurs.
If the investment is made by a company or a group
within the partnerships tax system, partners or members
must also retain shares of the company or of the group
for a period of five years from when the investment
is made. Failing this, they must add the amount of
deductions that they applied to their taxable income
for the year of sale.
2. Tax deduction for financial
investments (capital
subscriptions)
A. SUBSCRIPTIONS ELIGIBLE FOR TAX
DEDUCTION
Subscriptions eligible for tax deduction are as follows:
uusubscriptions to the capital of other companies sub-
ject to corporate tax, having their place of effective
management in Saint-Martin, and that engage in the
twelve months following the close of the subscription
in productive investment in Saint-Martin in the sectors
eligible for tax incentives listed in § 1 above;
uusubscriptions in the capital of companies engaged in
the renovation and rehabilitation of classified hotels,
tourist residences or holiday villages;
uusubscriptions in the capital of concession companies
making productive investments required to operate an
industrial or commercial local public service concession
or port terminal, whatever the nature of the assets
and their final use.
B. MECHANISM
The amount of tax deduction
The amount of tax deduction is equal to the amount
paid by the subscriber (including, where appropriate,
the amount of the premium), in other words, the cost
of the capital subscriptions.
Fiscal year in which the deduction is applied
The deduction is applied to the results of the year in
which payment is made.
C. OBLIGATIONS OF SUBSCRIBERS AND
BENEFICIARY COMPANIES
Companies that benefit from the deduction must
retain the shares subscribed for a period of at least
five years. In the event of non-compliance with this
obligation, the amounts deducted must be reported
to taxable income for the year of transfer and for the
entire sale price.
Beneficiaries of the subscription must make the
investment within twelve months following the end
of the subscription period, it being understood that
this requirement shall be considered satisfied if after
this period the company has made firm and definitive
commitments and corresponding down payments.
If the beneficiary of the subscriptions allocates all or
part of the subscription to the construction of buildings
for the exercise of an eligible activity, it must commit to
completing the foundations within two years following
the end of the subscription.
The beneficiary of the subscriptions must also commit
to maintaining the allocation of assets to the eligible
business for five years after their acquisition or during
the normal useful life, whichever is lower.
In the event of non-compliance with this commitment,
the amounts deducted are reported to the taxable
income of the company that operated the deduction for
the year in which non-compliance with the undertaking
is established.
22 BUSINESS TAXATION
DOING BUSINESS IN SAINT-MARTIN