Legal news

FILE : Withholding: last line-item!

According to recent polls, it seems expected by a majority of the French, the reform of withdrawing is not favorable with business leaders. And for reason ! Who looks forward to, without counterpart, playing the role of collector for the account of the State?

Nobody. But it’s there, after an ultimate psychodrama, the doubts of the President of the Republic seemingly lifted, the withdrawing will be entered good and well in vigor on the 1st of next January.

He will come back to you, from this date, to take, on the remunerations of your salaries, your income taxes and reverse it to the Public Treasure.

The amount of withdrawal is dependent on a tax that, for each of your salaries, you will be communicated by the administration through the famous nominative social declaration.

Stay assured that everything is working well and that your employees have understood that this reform is going to have an impact on their pay slip.

Also stay hopeful that the inevitable bugs will not be too many and will not put certain difficulties on your salaries.

In any case, the Cabinet is at your side to help you to manage this new constraint and, if you wish, to learn with you the possibility to indicate withdrawal, that is to say, to simulate the impact of this restraint on payslips of the last months of the year before the start of January 2019.

051118 Withholding, last line-item

Deductibility of the loan and acquisition interests on the bare ownership (nue-propriété) on the part of the property society (SCI): a missed appointment for equalizing harmonization

On the combined legal basis of the articles 8, 13, 1o и 31,I, 1o, d of the General Taxation Code of France (CGI) the loan interests are acquired personally by the holder of the bare ownership(nue-propriété) to finance the acquisition of the bare ownership (nue-propriété)  from its part, within SCI as a holder of the rented real estate, the property interests are not deductible if the interested person would receive them for other property or property rights since those interests cannot be considered as the exposed obligation for the acquisition or the conservation of the estate income in conformity if the administrative doctrine prescriptions.

On the other hand, on this very same legal basis the loan interests supported by the usufruct holder from the part of society to finance this acquisition since it the only subject to the income tax for the quota corresponding to the right in the social Income that he receives.

Finally, the loan interests actually paid by the bare ownership holder of the rented property (not a part of the SCI) and intended to finance either acquisition of the bare ownership either expenses of repairing, maintenance or improvement of such property are deductible from the property income coming from their other property if necessary.

CE, 8e et 3e ch., 24 févr . 2017, no 395983, Frank, concl. B. Bohnert, note P.-Y. Di Malta: JurisData no 2017 -004184.

The status of financial investment adviser (FIA), established by the law of 1st August 2003 is aimed at the reinforcement of protection of investors by better regulation of issues related to its activities. Thus, all FIAs fall under a certain number of duties, conditions and prohibitions controlled by the AMF.

Conditions of implementation of the activities of the financial investment adviser  

Schematically, except the obligation to be a member of the Association of Financial Investments Advisers, every intermediate have to meet the following conditions:

• Condition of habitual residence in France;
• Condition of age and respectability;
• Condition of professional ability;
• Condition of the professional liability insurance.

А. Condition of habitual residence in France

The Statute of the FIA imposes on individuals and legal persons an obligation of habitual residence in France (art. L. 541-2 of the Monetary and Financial Code).

В. Condition of age and respectability

To carry out this activity, the financial investment adviser, whether an individual or a person having the power to manage or administer a legal person, have to fulfil the following conditions:

• Conditions of the age: to be an adult;
• Conditions of the respectability according to the article L. 541-7: not to be subject to disabilities of the article L.500-1 of the Monetary and Financial Code and/or not be subject to sanctions of AMF on the prohibition of activities on a temporary or permanent basis.

С. Condition of professional ability:

Conditions of professional ability necessary for obtaining the status of the financial investment adviser are established by the General regulation of AMF, especially by its article 325-1. In order to exercise this activity, the person has to:

• • Whether dispose the national diploma leading to three years of higher legal, economic or management studies, or a diploma or a certificate of a similar degree suitable for carrying out the operations, mentioned in the article L. 541-1 of the Monetary and Financial Code;

• Or receive the professional training of a minimum duration of 150 hours, acquired from an investment services provider, an association of financial investment advisers or a training organization, adapted:

• to implementation of operations with financial instruments (art. L. 211-1 of the Monetary and Financial Code);
• to provision of investment services (art. L. 321-1 of the Monetary and Financial Code);
• to the realisation of operations with various goods (art. L. 550-1 of the Monetary and Financial Code).

• Or to have a professional experience of at least 2 years. This experience should be acquired during the five years preceding his entry into office concerning the functions connected with the implementation of the operations described above. The professional experience should be acquired from an investment services provider, a financial investment advisor, an investment services agent or an insurance intermediary.

Concerning the diploma, the instruction of the AMF n°2013-07 from the 24th April 2013 stipulated that it should be registered in the national directory of professional certificates, in one of the nomenclatures of educational specialties mentioned below:

– 122 (Economy),

– 128 (Law and political sciences),

– 313 (Finances, banks, insurance agencies and real estate agencies),

– 314 (Accounting, management).

As well as the diplomas or certificates of the same level including foreign diplomas recognized by the ENIC-NARIC Center on the basis of a certificate of comparability.

In the context of the provisions relating to the obligation to update members’ knowledge at the expense of professional associations, the training for professional ability of the financial investment adviser covers such topics as:

– general knowledge about consultations on financial investments;

– general knowledge on the marketing methods of financial instruments;

– rules of good conduct of the financial investment adviser;

– rules of organization of the financial investment adviser.

Moreover, the financial investment adviser, whether an individual or a person having the power to manage or administer a legal person engaged in the activity of a financial investment advisers,

falls under the conditions of professional competence and business reputation, according to the article L. 541-2 of the Monetary and Financial Code.

1. D) Condition of the professional liability insurance:

According to the article L. 541-3 of the Monetary and Financial Code, in order to exercise the activity, the financial investment adviser has to acquire professional liability insurance covering the financial consequences of his activity. The threshold of this guarantee differs according to whether it is a natural person or a legal person employing at least two employees who exercise this activity.

• For a natural person and a legal person with less than two employees: 150,000 euros per insurance case and 150,000 euros per year of insurance;
• For a legal person with two and more employees: 300.000 euros per insurance case and 600,000 euros per year of insurance;

These guarantees take effect on March 1st for a period of twelve months; the contract is tacitly renewed on January 1st of each year.

According to the article D.541-9, the financial investment advisers do not fall under the amounts indicated above if they realize a consulting activity concerning exclusively the services related to investment services in accordance with the article L.321-2.

From the article L. 541-2 of the Monetary and Financial Code follows that only individuals can manage a legal person that realize an activity of the financial investment adviser. So, according the article 1 of the Decisions of 1st March 2012 about a single register, only individuals can figure at the register of ORIAS.

The Recommendation of AMF N° 2006-23 in the paragraph 2.1 b) has introduced a new rule regarding the incompatibility of the category of financial investment adviser (CIF) with the category of the Agent of Investment Services Providers (Agents Liés de Prestataires de Services d’Investissements ALPSI).

Luxembourg life insurance (l’assurance-vie luxembourgoise) in financial management

Usually called “Luxembourg life insurance” (l’assurance-vie luxembourgoise), life insurance contract (or a contract of the capitalization) put on the market by the insurance companies located in Luxembourg, has a great success in Europe and especially in France (the first country collector with 30% of purchase). Substantially and functionally very similar to French life insurance, it has a lot of undeniable advantages for the depositors concerned about optimization of their property: a leveraged insurance by their regulations, international adaptability possible due to their tax neutrality and the modes of financial management which can be created as required. Nevertheless, the subscription to the Luxembourg contract is followed by certain specificity which cannot be adapted to all the client profiles, thus the consultation of the financial adviser  stays inevitable.

On the combined legal basis of the articles 8, 13, 1o и 31,I, 1o, d of the General Taxation Code of France (CGI) the loan interests are acquired personally by the holder of the bare ownership(nue-propriété) to finance the acquisition of the bare ownership (nue-propriété)  from its part, within SCI as a holder of the rented real estate, the property interests are not deductible if the interested person would receive them for other property or property rights since those interests cannot be considered as the exposed obligation for the acquisition or the conservation of the estate income in conformity if the administrative doctrine prescriptions.

On the other hand, on this very same legal basis the loan interests supported by the usufruct holder from the part of society to finance this acquisition since it the only subject to the income tax for the quota corresponding to the right in the social Income that he receives.

Finally, the loan interests actually paid by the bare ownership holder of the rented property (not a part of the SCI) and intended to finance either acquisition of the bare ownership either expenses of repairing, maintenance or improvement of such property are deductible from the property income coming from their other property if necessary.

By the court decision of the 31 march 2017 the Council of the State it was admitted the validity of the bare ownership (nue-propriété) donation of the shares under condition of reinvestment and postponement of the unsecured usufruct. By this the supreme judges confirm their position of the 10 February (CE, 9e et 10e ch., 10 févr. 2017, no 387960 : JurisData no 2017-002348; RFP 2017, comm. 8, note S. Torricelli-Chrifi ; JCP N 2017, no 18, 1172, note J.-J. Lubin ; Dr. Fisc. 2017, no 14, comm. 239, note R. Mortier). Little by little, at will of the court decision appears the supervision of the donation cession of the shares in the vis-à-vis abuse of rights process.