Exemption of capital gains on the transfer of sole proprietorships and overhaul of the small business exemption

Article 34 of the 2005 Amending Finance Act creates Article 238 quindecies of the General Tax Code: capital gains made on the transfer of a sole proprietorship or a complete branch of activity carried on for at least five years are fully exempt when the value of the transferred assets does not exceed €300,000, and partly exempt, on a sliding scale, between €300,000 and €500,000. Real estate remains taxed under ordinary rules. Article 37 rewrites Article 151 septies: gains from activities carried on professionally for at least five years are fully exempt if annual receipts do not exceed €250,000 (sale of goods, accommodation, farming) or €90,000 (other activities), and partly exempt up to €350,000 or €126,000; Article 202 bis is repealed. These provisions apply to transfers and gains made from 1 January 2006.