New Benefits and Limitations of the “apport-cession”: The Use of Successive Restructuring Transactions Is Now Unlimited

Under administrative doctrine, contributions and exchanges of securities resulting from a contribution-transfer were permitted only up to a limit of two consecutive contribution or exchange transactions. A third transaction involving securities subject to a tax deferral resulted in the expiration of the initial deferral and the taxation of the capital gain under income tax and social security contributions (BOI-RPPM-PVBMI-30-10-60-20160304, No. 560), thereby constituting a significant obstacle to the implementation of restructuring transactions, even when they were spaced far apart in time.

The 2016 Amended Budget Act (Article 32, I-3°-b and c, and II-B) has usefully relaxed this restriction by allowing successive contribution or exchange transactions without limiting their number. This facilitates restructuring transactions, particularly through subsequent contributions or mergers.