It should be borne in mind that France and Norway signed on April 7, 1995 an amendment, the aim of which was to modify the Double Tax Treaty of December 19, 1980 especially with respect to dividends, interests and cancellation of doubles of taxation.

Its main provisions are the following:

a) Dividends

The withholding tax provided by Article 10, paragraph 2 of the Double Tax Treaty will not be levied for dividends paid by companies resident of a State to their parent companies resident of another State when the latter holds an interest in the capital of the distributing company equal to at least 10% (direct or indirect) in the case of Norwegian parent companies and 25% (direct interest) in the case of French parent companies.

Paragraph 8 of Article 10 which provided for the possibility to apply to permanent establishments of Norwegian companies in France the withholding tax provided by Article 115 quinquies of the French General Tax Code at a maximum rate of 5% will also be cancelled.

b) Interests

The amendment provides that no withholding tax will be levied on interests.

c) Cancellation of double taxations

Article 24 of the Double Tax Treaty will be modified according to the practice currently in force in France for the cancellation of double taxations (generalized tax credit).

For dividends, capital gains concerning real estates/buildings or company securities (mainly real estate securities), incomes from freelance professions, remunerations corresponding to a salaried employment exercised in a ship or an aircraft operated on an international basis trade, director's fees as well as remunerations of artists and sportsmen, the tax credit will be equal to the amount of the tax paid in Norway; this credit will however not exceed the amount of the French tax corresponding to these incomes.

For other incomes, the tax credit will be equal to the amount of the French tax corresponding to these incomes.

Concerning wealth taxation, France will grant a tax credit equal to the tax collected on wealth elements taxable in Norway. However, it will not be possible for this credit to exceed the amount of the French tax linked to these wealth elements.

The provisions of this amendment apply:

  • concerning taxes collected by way of withholding tax to sums taxable as of September 1st, 1996;
  • concerning income taxes which are not collected by way of withholding tax, to incomes linked to any calendar year or any tax year beginning as of January 1st, 1997;
  • concerning other taxes (wealth tax especially), to taxations the generating event of which will occur as of January 1st, 1997.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be brought about your specific circumstances.

For additional information contact Claire Acard on 33/(1)/55 61 10 10, Lionel Benant on 33/, Joel Fischer on 33/, or Laurent Borey on 33/(1).55 61 10 10 or enter text search: "ARCHIBALD ANDERSEN Profile".

The members of ARCHIBALD ANDERSEN Association d'Avocats (S.G. Archibald and Arthur Andersen International) are registered with the Hauts-de-Seine Bar and the Lyon Bar.