Tax Matters

1) Income tax

For the GFA:
Failing any option for the fiscal regime of capital companies (corporate tax), the principle is the fiscal transparency regime. If the GFA leases the vineyards it owns, the income regime will be the land revenue regime. When drawing up the income declaration, the GFA will also deduct the land tax for the goods it possesses.

For the individual belonging to the GFA:
If the individual takes a loan to purchase his or her shares, s/he can deduct the financial charges of the loan relating to the acquisition. Moreover, if the individual derives a negative rural and land return, this deficit can be carried across the urban land profit without any limitation.


2) Transfer of GFA shares

With effect from 1 January 2009, article 730b of the CGI foresees the application of a fixed duty of 125 Euros on the transfer of shares from all non-trading companies whose main aim is agricultural, even those which are not active.


3) Inheritance and donation law

GFA shares give rise to partial exemption from inheritance and donation duties.

This advantage is an allowance of 75% of the value for the calculating of duties up to 101,897 Euros (2011) of given property to the same beneficiary and 50% above this 101,897 Euros.

However, a certain number of conditions should nevertheless be complied with:

  • GFA associates are indefinitely liable for any business debts in proportion to the shares they hold in the capital.
  • The GFA shall not be involved in direct farming. Agricultural property which comprises the property of the GFA must be subject to long-term lease, in other words, lease agreements for a minimum of 18 years.
  • Shares should be held for at least two years by the holder or the deceased.
  • The shares received shall remain the property of the donor, the heir or legatee for at least 5 years with effect from the time that they are transmitted free of charge.

If all these conditions are met, the allowances of 75% and 50% apply to each transmission, without any limitation as to the number.


4) Wealth tax

If the conditions set out previously for the partial exoneration of inheritance or donation duties (3) are complied with, the GFA share are entitled to a 75% allowance of their value for the calculation of the duties up to 101,897 Euros, and for half above this (Article 885H of the CGI amended by Law N° 2008-1425 dated 27/12/2008; Article 39 (V)).

The above is a summary of certain tax considerations for investors domiciled in France. This summary is based upon the Code General des Impôts, judicial decisions, Regulations and rulings in existence on the dates hereof, all of which are subject to change. In making an investment decision, prospective investors must rely on their own examination of the offering, including the merits and risks involved. Prospective investors should not construe the contents of this website as investment, tax or legal advice. Each prospective investor is urged to consult with, and must rely upon the advice of his or her investment, tax and legal advisors with respect to the suitability of an investment in shares.





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