The Finance Act 2018 has introduced a registration duty exemption for acts of capital increase realized by cash, by incorporation of shareholder’s current account or by capitalization of profits or reserves.
However, the proportional rate of 1% remained applicable to some capital increase operations carried out by:
- Contributions in kind;
- Incorporation of liquid and payable debts on the company (other than those appearing in shareholder’s current account);
- Incorporation of capital gains resulting from the revaluation of the company’s assets in case of merger.
The Finance Act 2021 has reduced the registration duties applicable to acts of capital increase carried out through the above mentioned operations. This rate is now 0.5% instead of 1%, it is applied on the amount or value of the contribution, including the share premium.
It should be noted that merger operations are subject to the common law regime for contributions carried out at the capital increase of companies. However, in the event of a merger by absorption, the deed recording the capital increase of the absorbing company is subject to registration duty at the rate of 0.5%, calculated on the amount or value of the contribution, including the merger premium and after deduction of the liabilities encumbering the contribution borne by the absorbing company.