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France: Tax-Efficient Sectors

Mineral Extraction Companies

Companies involved in the extraction of minerals of value to the French economy can deduct from trading profits assessed to an annual corporate income tax levy the full value of a reserve fund into which has been transferred either:

  • 50% of taxable profit arising from the sale of mineral products whether before or after processing; or
  • 15% of the proceeds of sale from the sale of mineral products extracted by the company or purchased from foreign subsidiaries in which it directly or indirectly holds 50% of the voting rights (or 20% of the voting rights where the Government grants special approval).

The reserve fund must be used within 5 years either to purchase capital assets, to finance research into the exploitation of mineral reserves or to purchase participating interests in companies involved in the exploitation of such reserves. If the reserve is not used in this way the fiscal concession is abrogated and the reserve is added back on to taxable profit at the end of the 5 year period and taxed accordingly.

The law is laid out in article 4C of Annex IV in the General Tax Code and was passed with a view to creating incentives for French companies to renew strategic mineral reserves in the future. It represents a significant fiscal concession.



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