Amendment to the France-Luxembourg Tax Treaty: not applicable until 2017!
15 December 2015
Client Alert | France | Tax
The French National Assembly (lower house of parliament) has just voted in favour, on first reading, of a bill authorising approval of the 4th amendment to the tax treaty between France and Luxembourg. The Government has implemented the expedited procedure for this bill, meaning that it will be submitted to a vote in the French Senate (upper house of parliament) on 16 December 2015. On the Luxembourg side, the treaty has already been ratified.
Even if the bill is passed and the exchange of ratification instruments occurs before the end of the year, the amendment would enter into effect as from 1 January 2016 but, in accordance with the provisions of Article 2(2), would in fact only apply to financial years, taxable events or sums taxable as from 1 January 2017 onwards.
Luxembourg companies holding securities in French real-estate companies will therefore continue to be exempt from tax in France on the corresponding capital gains received in 2016.