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This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
 Article 16 of the TEPA law of August 21st, 2007 and the Finance Law introduces a Wealth tax rebate for investments in SME and investment in FCPI and FCPR.
- Managers investing in their own company may benefit from the tax relief;
- The cap of the wealth tax relief is raised from 10.000€ to 20.000 € for subscriptions in FIP, FCPI, FCPR;
- The benefit of the tax relief, cap at 50.000 €, request to keep the shares until December 31st of the fifth year following the subscription.
The potential restrictions provided by the EU “de minimis” rule cannot jeopardize the Wealth tax reduction granted to wealth tax payers.
Equity infusion in SME - Compatibility with EU de minimis rule
Article 16 of the TEPA law of August 21st, 2007 introduces a Wealth tax rebate for investments in SME and investment in FCPI and FCPR. This rebate should however comply with EU "de minimis" rules which cap to 200.000€ over a period of 3 years the amount of subsidies granted by Governments to companies. Subsidies paid in excess of this amount have to be paid back.
With this respect the Finance Law for 2008 required new conditions for SME benefiting of investments by Wealth taxpayers. Eligible SME have to be new or expending start-up in order to not be subject to the restriction of the EU “de minimis” rules.
These new rules will come enter in force by decree not later than June 30th, 2008. In the mean time EU "de minimis" rules will apply to all SME. As of the entry in force of the new rules the two provisions will apply.
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