Key figure
The Dutreil Pact facing possible reform
Dutreil Pact
75% exemption:
The Dutreil Pact facing possible reform
The Dutreil Pact facing possible reform
A key mechanism for business succession — and one we help our clients safeguard.
The Dutreil Pact, a cornerstone of French business succession planning, currently offers a 75% reduction in transfer taxes when certain conditions are met (holding commitments and managerial involvement). When combined with a bare-ownership gift, it often allows entrepreneurs to transfer their company at an effective tax cost of only 2–5%.
However, several amendments currently under discussion could make the system less favorable:
- Extending the total holding period to 8 years (instead of 6);
- Excluding non-business assets such as financial investments or excess cash within holding companies;
- Requiring at least one beneficiary to be aged between 18 and 70.
If adopted, these measures could significantly affect family-owned groups.
At EUROP-CONSULT, we help shareholders and family business owners secure their succession strategies ahead of the reform, ensuring a stable and optimized tax framework for their future generations.
The Dutreil Pact, a cornerstone of French business succession planning, currently offers a 75% reduction in transfer taxes when certain conditions are met (holding commitments and managerial involvement). When combined with a bare-ownership gift, it often allows entrepreneurs to transfer their company at an effective tax cost of only 2–5%.
However, several amendments currently under discussion could make the system less favorable:
- Extending the total holding period to 8 years (instead of 6);
- Excluding non-business assets such as financial investments or excess cash within holding companies;
- Requiring at least one beneficiary to be aged between 18 and 70.
If adopted, these measures could significantly affect family-owned groups.
At EUROP-CONSULT, we help shareholders and family business owners secure their succession strategies ahead of the reform, ensuring a stable and optimized tax framework for their future generations.