French Partnerships

It concerns non-trading companies, non-trading properties, general partnerships...

Calculation

The tax return (n°2048 IMM) is only done for the partnership, but taking into account the situation of each partner (page 3 of the tax return) :

• partners « private individuals »

The capital gain is calculated according to the rules applying to individuals (page 2 of the tax return).

The deduction of 1.000 € is, however, only applied once, whatever the number of partners.

The capital gain is taxed between the partners according to their share. The tax rate depends on the residence of each of them (19% for EU residents, 31,3% for French resident, 33,1/3% for the others).

• partners who are legal entities with head office abroad

The capital gain is calculated according to the rules applying to legal entities (page 4 of the tax return : neither flat rates of 7,5% and 15% nor the deduction for duration of ownership are applicable, but a deduction per year of purchase price and costs for property and not for land).

The capital gain is copied out on page 2, according to the interest of the company into the French partnership, and taxed at a single rate (33,1/3%).

Appointment of a tax representative
(see on column « When do you have to appoint a tax representative ? »

• from the moment a foreign legal entity is partner : the French partnership has to appoint an accredited representative whatever the selling price and the date of purchase.
• or if the interests of the foreign partners « private individuals » together is equal or higher than 150.000 € and they are owners for less than 15 years.

Exemptions

• the threshold of 15.000 € depends on the overall selling price, not on the interests of each partner.
• the partners who are legal entities are never exempted for duration of ownership.
• the exemption for sale of its property in France cannot be applied to foreign partners (except for French residents partners, if it concerns their main residence).