One-third allowance per year of holding beyond the fifth on capital gains from share disposals

Article 29 of the 2005 Amending Finance Act inserts Articles 150-0 D bis and 150-0 D ter into the General Tax Code. Net gains on the sale of shares, company units or split rights in them are reduced by an allowance of one third for each year of holding beyond the fifth, leading to a full income tax exemption after eight years. The company must be subject to corporate tax, carry on an operating activity and have its registered office in the European Economic Area. For securities acquired before 2006, the holding period runs from 1 January 2006. By exception (Article 150-0 D ter), SME managers selling their shares on retirement benefit immediately, with the holding period counted from acquisition, for sales made until 31 December 2013.