LeXcom Law firm

The French rectifying bill for 2009 put the end to a long litigation story and agreed with the position of the French tax administration : French registration tax (at a 5% rate) is due on the sale of shares held in a foreign entity whose assets are, or have been for the year preceding the transfer of shares, composed for more than 50% with French real estate or French real estate rights.

In a ruling 7D-2-10 of May 20, 2010, the French tax administration comments on the possible credit for foreign tax paid on the sale of shares of the foreign entity.

In case the foreign tax exceeds the French tax, the exceeding amount is not refunded by the French tax administration. The credit is possible only to the extent the foreign tax administration issues a certificate mentioning the amount paid abroad and the corresponding type of tax (i.e such a tax must be similar to a French registration tax).

Finally, the French tax administration reminds that the French registration tax is due even in the absence of any written agreement on the transfer of the shares.