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Capital gains tax: gains from disposals of business assets

In general, capital gains derived from the disposal of business assets by an individual may be taxed in one of two ways in France depending on whether they are short-term or long-term gains. The gain is calculated as the sales price of the asset less the acquisition cost and recaptured depreciation. The gain is subject to tax at the standard progressive tax rates.

Short-term gains from the disposal of assets held for less than two years are subject to tax as business income and an option to spread the gains over a three-year period is available.

Long-term gains, ie, gains from the disposal of assets held for two years or more, are subject to tax at a flat rate of 12.8%, increased to 30% by the addition of 17.2% social taxes. However long-term gains may be exempt, provided that the taxpayer's turnover does not exceed a certain ceiling and the activity is exercised for five years or more.

In general, if the annual turnover, excluding VAT, does not exceed EUR 90,000