In a recent instruction, the French Tax Authorities comment the changes related to the formalities and payment of withholding tax applicable to fixed income investments. Thus, the forms no.2753 linked to witholding tax provided by Article 119 bis-1 of the French General Tax Code on the revenues of some bonds and similar securities, going together with the tax payment, must now be sent to the "recette des impots des non-residents", located 9, rue d'Uzes, 75094 Paris cedex 2, whatever the location of the issuing collectivity instead of to the head-office centre (Inst. October 14, 1996, 5 I-5-96).

The Tax Authorities have also created a new model of the tax return no.2777 relating to withdrawals on revenus of fixed income investments and withholding taxes on revenues of securities. For all informants, this tax return should now (in most of the cases, as of the returns relating to October 1996) be sent to the "Centre des Impots des non-residents".

As of 1997, it will be possible to fill in the return no.2777 from a computer, provided the existence of an agreement. A recent instruction (dated October 14, 1996, 5-I-5-96) shows the setting-up of these modifications:

a) New forms: the return no.2777 has been reviewed in order to improve the legibility of the form and simplify declaratory obligations.

The seven appendices which detailed each revenue (but for bonds issued on January 1st, 1987 and shares issued by the receivables mutual funds more than five years old which indeed did not include particular appendices) subject to a withdrawal or a withholding tax are cancelled.

The new return no.2777 must from now on be subscribed by the taxpayer in two originals.

The returns no.2777 must be filed with their means of payment, except in the case of direct wire transfer to the Tax Centre, to the "Centre des Impots des non-residents", 9 rue d'Uzes, 75094 Paris cedex 2 (and no longer at the head office centre).

The possibility of allocation of the sums reimbursed to non-residents (form no.2777) on incomes of bonds and other borrowing securities which may be negotiated (returns no.2753) subscribed by paying institutions on their behalf or on behalf of issuers with which they concluded a mandate agreement is mentioned.

The possibilities of allocation will from now on exclusively be inside the return no.2777 and will have to be justified by the declaring persons, especially due to the effect of international treaties. The conditions of allocation and the justifying documents required are indicated on the form no.2777 bis.

b) Computerised tax returns

The Tax Authorities have decided to allow, as of 1997, the subscription of the return no.2777 on other forms than those provided by the Tax Authorities.

It is specified that, whatever the software used, the prior authorisation from the Tax Authorities is essential. The agreement will be issued when the model drafted includes any detail of the return no.2777 in order to fulfill the management and control of taxes.

The agreement will be granted without any duration limit. It may only be renewed in the two following cases:

  • if the designer intends to modify the draft which has been signed;
  • in the hypothesis in which a legislative or regulatory improvement would make it necessary to update the tax form. The Tax Authorities will inform the involved organisations that they have to file a new form.

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