TL;DR: If you are concerned by compensation related to the loss of the right of presentation, you must primarily examine Article 13 of Law No. 2011-94 of 25 January 2011, Article 35 of Law No. 2011-1978 of 28 December 2011 and the regime for professional capital gains. For certain retirements, Article 151 septies A of the CGI is also mentioned.
The reform of the avoués
Law No. 2011-94 of 25 January 2011 replaced the profession of avoué before the courts of appeal with that of avocat as from 1 January 2012. Its Article 13 is associated with the compensation paid due to the loss of the right to present a successor for the approval of the Keeper of the Seals.
This analysis concerns this specific compensation. It does not cover other amounts that an avoué might receive.
The tax regime for the compensation
Compensation for the loss of the right of presentation is taxable under the regime for professional capital gains. The available sources do not make it possible to specify here all the methods for calculating the taxable capital gain.
Article 35 of Law No. 2011-1978 of 28 December 2011 on the amending finance law for 2011 contains the tax measures accompanying the reform. For an avoué practising in a professional civil partnership, this scheme is intended in particular to avoid taxation exceeding the actual enrichment and allows, by election, the deferral of taxation of all or part of the taxable capital gain.
The precise conditions, the duration of the deferral and the reporting obligations associated with it are not specified in the elements examined.
Retirement
Article 151 septies A of the CGI is cited for the exemption from compensation applicable to certain avoués when they retire. Article 54 of the amending finance law for 2009, Law No. 2009-1674, is also associated with this regime.
Paragraph II of Article 35 of Law No. 2011-1978 extended until 31 December 2012 the period allowing avoués to exercise their retirement rights while benefiting from the exemption provided for under Article 151 septies A of the CGI.
You must not infer the complete conditions for the exemption from these references, as they are not established by the available extracts.
Cessation of activity
Article 35 also provides for specific arrangements concerning the tax consequences of the cessation of the business of avoués who cease their activity on 1 January 2012.
The available sources refer to this scheme but do not detail its implementation arrangements. You must therefore distinguish this issue from the tax regime for compensation for the loss of the right of presentation.
The references to remember
You must remember the following references:
- Article 13 of Law No. 2011-94 of 25 January 2011, for the reform of the profession and the compensation related to the loss of the right of presentation;
- Article 35 of Law No. 2011-1978 of 28 December 2011, for the tax measures accompanying the reform, in particular the tax deferral applicable in certain situations;
- the regime for professional capital gains, for the taxation of the compensation;
- Article 151 septies A of the CGI, for the exemption that may concern certain avoués retiring;
- Article 54 of Law No. 2009-1674 of 30 December 2009, cited in connection with this exemption regime.
Articles 93 and 93 A of the CGI concern the reporting of avoués’ fees and the regime for acquired receivables. In the sources examined, they are not the specific references for the treatment of compensation for the loss of the right of presentation.