LUXEMBOURG
On September 5, 2014, the Ministers of Finance of France and
Luxembourg signed an amendment (Lux Amendment) to the double tax
treaty entered into between France and Luxembourg on April 1, 1958,
as amended by the 1970 exchange of letters and by the 1970, 2006,
and 2009 protocols (FR/Lux Treaty).
The Amendment, in line with the current OECD Model Tax Convention
on Income and Capital, essentially attributes to France the right
to tax capital gains arising from the disposal, by a Luxembourg
resident, of shares into French real estate companies.
The Amendment will enter into force on the first day of the month
following the completion of the reciprocal notification process
attached to its ratification in each of France and Luxembourg.
Further, for taxes on income that are withheld at source (such as
the 33.33 percent withholding tax applicable under French tax law
to capital gains realized by nonresident entities upon the disposal
of French real estate assets or companies), the Amendment would
apply to amounts that are taxable after the calendar year during
which it enters into force.
A draft bill was submitted to the Luxembourg Parliament on June 9,
2015, and a draft bill was submitted to the French Parliament on
July 1, 2015. It is consequently very likely that the ratification
process will be completed in the coming months, and that the
Amendment will enter into force on January 1, 2016.
Please see our
Update for October 2014 for further details.
GERMANY
On March 31, 2015, the Ministers of Finance of France and Germany
signed an amendment (Ger Amendment) to the double tax treaty
entered into between France and Germany on July 21, 1959, as
amended by the 1969, 1989, and 2011 protocols (FR/Ger
Treaty).
A draft bill has already been submitted to the German Parliament,
and it is France's intent, to the best of our knowledge, to
complete the ratification process of the Ger Amendment before
year-end.
We will further analyze the new provisions and corresponding
implications of the Ger Amendment in an upcoming Update.
SINGAPORE
On January 15, 2015, the Ministers of Finance of France and
Singapore signed a new double tax treaty (New FR/Sing Treaty) that
will come into force upon completion of the constitutional
requirements in the two countries.
To the best of our knowledge, it is France's intent to complete
the ratification process of the New FR/Sing Treaty before
year-end.
Please see our
Update for February 2015 for further details.
ANDORRA
On April 2, 2013, the Ministers of Finance of France and Andorra
signed a new double tax treaty (New FR/Andorra Treaty) that will
come into force upon completion of the constitutional requirements
in the two countries.
The New FR/Andorra Treaty entered into force on July 1, 2015.
Please note, however, that most provisions will not be effective
until January 1, 2016.
Interestingly, the New FR/Andorra Treaty provides that France
retains the right to tax French nationals residing in Andorra, as
if the New FR/Andorra Treaty did not exist. As France does not
impose any taxes, as of yet, on the basis of nationality or
citizenship, such provision should not give rise to any immediate
consequences.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
