How to calculate registration fees when transferring goodwill?
Verified 01 January 2024 - Legal and Administrative Information Directorate (Prime Minister)
The change of a business gives rise to a declaration and the payment of registration fees to the tax authorities. The formalities to be completed differ depending on whether the fund has been transferred for consideration (sale) or free of charge (donation).
Transfer for consideration
The deed of assignment must be filed with the tax office of the registration without waiting if it is a privately signed document or, in a 1-month period after the sale is signed, if the authentic instrument.
You must submit to the registration department, on site or by mail, the following items:
- Deed of transfer of the goodwill in 2 copies
- Trade Transfer Declaration Form in 3 copies
- Form for declaring the condition of equipment and goods transferred in 3 copies
- Payment of registration fees (in cash up to €300, by check or by transfer)
The deed of assignment must also be published in a legal listing support in a 15-day period after the sale is signed. If it is an act of assignment under private signature, that publication must be preceded by its registration with the tax department responsible for registration. L'authentic instrument The transfer may be published before registration.
Declaration of transfer of goodwill or goodwill
Declaration of transfer of goodwill or goodwill: condition of equipment and new goods transferred
The announcement must then be sent to the commercial court registry for publication in the Bodacc: titleContent.
Who shall I contact
Registration fees are calculated on the sale price as follows:
Taxable value | Budgetary law | Departmental tax | Municipal tax | Total |
|---|---|---|---|---|
Enter €23,001 and €107,000 | 2% | 0.60% | 0.40% | 3% |
Enter €107,001 and €200,000 | 0.60% | 1.40% | 1% | 3% |
Greater than €200,000 | 2.60% | 1.40% | 1% | 5% |
The minimum amount of registration fees collected by the tax authorities is €25.
If the sale of goodwill includes sales of new goods, these are exempt from registration fees.
The cost of registration is at the expense of the purchaserHowever, there is nothing to prevent the seller from covering some or all of these costs.
Please note
for goodwill acquisitions up to €107,000 and carried out in urban free zones-entrepreneurial territories (ZFU-TE) and Rural Revitalization Areas (RRZs), the registration fees are reduced of 3% to 1%.
In order to benefit from this reduction, the purchaser must undertake to maintain the operation of the acquired fund for at least five years.
Who should we give in to?
The transfer shall be subject to abatement of €500,000 on the value of the fund when realized at one of the following :
- Let's say one employee of the transferred company. He must have been employed on a full-time contract for at least 2 years or have a apprenticeship contract ongoing at the time of transfer.
- Let's say one family member of the transferor (her Civil partnership or partner, her direct ascendants or descendants, or her siblings)
What are the conditions to be met?
This reduction shall be applied when all following conditions are respected:
- The company shall exercise commercial, industrial, craft, agricultural or liberal activity, with the exception of the management of its own movable or immovable property.
- The transferor shall have held the fund for more than 2 years (if the transferor has itself acquired the fund free of charge, no holding period is required).
- The purchaser must continue to operate the fund as a professional activity unique and in an effective and continuous manner, for 5 years after the date of sale.
- The purchaser must to ensure effective management of company during these five years.
Warning
Where the required conditions are not fulfilled, the reduction shall be questioned. The purchaser must then pay the duties from which he was exempted.
Transfer free of charge
The donation document must be deposited with the tax department of the registration in a 1-month period following the signature of the donation.
You must submit to the registration department, on site or by mail, the following items:
- Deed of gift of the goodwill in 2 copies
- Trade Transfer Declaration Form in 3 copies
- Form for declaring the condition of equipment and goods transferred in 3 copies
- Payment of registration fees (in cash up to €300, by check or by transfer)
Declaration of transfer of goodwill or goodwill
Declaration of transfer of goodwill or goodwill: condition of equipment and new goods transferred
Who shall I contact
Please note
After deposit at the registration office, the donation document must be published in a legal listing support. The announcement must then be sent to the commercial court registry for publication in the Bodacc: titleContent.
When a donation is made, the tax administration collects registration fees: a tax called gift tax.
Donation fees are paid by the purchaser but the donor may decide to pay for them.
To calculate this tax, the tax department of the registration proceeds as follows:
- It takes into account the value of the gift.
- He then deducts from this first value the amount of any deductions.
- Finally, it applies a tax scale to the value found.
The amount of the rebate and the tax rate vary depending on the relationship between the donor and the donee (the transferee).
Example :
You're giving your daughter a goodwill worth €320,000No, that's the value of the donation. A donation to one of your children has 2 consequences:
- A reduction of €100,000 applies, i.e. 320 000 - 100 000 = €220,000.
- The scale of taxation shall be 20%.
Thus, you or your daughter (of your choice) will have to pay transfer fees equivalent to 20% of €220,000, or €44,000 of rights.
To facilitate the transmission of companies, specific exemptions may apply and reduce the amount of registration fees to be paid.
Pact Dutreil
The transmission of family companies is facilitated by the Dutreil system, which gives the right to partial exemption donation rights, up to 75% the value of the company.
In other words, only a quarter (25%) of the value of the company will be taken into account to calculate the amount of the gift tax.
The Dutreil Pact applies if 3 cumulative conditions are respected:
- The company was detained for at least 2 years by the transferor. No time limit shall be imposed if the transferor has itself acquired the fund free of charge.
- Each recipient of the gift undertakes to keep the company and the assets allocated to it for 4 years.
- One of the beneficiaries must undertake to carry on the company's activities for 3 years from the time of transmission.
Warning
the Dutreil scheme is only applicable to companies engaged in industrial, commercial, craft, agricultural or liberal activities. Companies which have as their object the management of a movable or immovable property (for example SCI) are excluded.
Early transmission
If the transferor has under 70 at the time of transmission, a further reduction of 50% transfer duties apply to the taxable part of the donation.
The mechanism of early transmission is combined with the possible reductions and advantages of the Dutreil Pact.
Specific exemption for employees
In order to facilitate the transfer of very small companies to employees, a system of exemption from gift tax has been introduced.
This advantage takes the form of a abatement of €500,000 on the amount of the donation where all of the following conditions are met:
- The company was detained for at least 2 years by the transferor. No time limit shall be imposed if the transferor has itself acquired the fund free of charge.
- Beneficiary employees are in apprenticeship or training DTA for at least 2 years and are engaged in full-time work.
- Beneficiary employees must provide company management for at least 5 years.
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Tax system for transfers of goodwill
Minimum collection
Formalities in the event of transfer
Exemption from registration fees
Exemption in the case of donations to employees