France Tax News
European Commission requests Belgium to terminate discriminatory taxation of inbound dividends
European Commission requests Belgium, Italy, Luxembourg, Netherlands, Portugal and Spain to terminate discriminatory taxation of outbound dividends
European Commission requested Spain to end infringement to the EC Parent-Subsidiary Directive concerning the use of anti-abuse measures
Treaty between France and Chile ratified
Treaty between Australia and France signed
Treaty between Peru and France – negotiations
Preliminary ruling requested from ECJ on compatibility of 3% tax on French immovable property held by non-resident companies with EC freedom of establishment and free movement of capital movement
Guideline on pre-approval of favourable regime for transfer of complete branches of activity
Luxembourg Court
US Senate ratifies protocols to income and capital, and estate, inheritance and gift, tax treaties between France and US
US Foreign Relations Committee approves protocols to income and capital, and estate, inheritance and gift, tax treaties between France and US
Modifications to participation exemption regime
US
French Court of Appeals decision on debt waivers granted to branches of foreign subsidiary by French parent company published
The US Tax Court has disallowed a deduction for a contribution to a French pension plan and payment of French real estate taxes. Isabelle Bichindaritz v. Commissioner of Internal Revenue (T.C. Memo 2005-298 dated 29 December 2005). The case involved a French citizen who was teaching at a US university. She claimed a deduction on her US tax return for a contribution to a French pension plan and also a deduction for the payment of French real estate taxes.
French Guideline on treaty treatment of Canadian mutual funds in securities published
It has been reported that France will begin official negotiations with Japan on 25 January 2006 to revise the France-Japan income tax treaty of 3 March 1995. The main purpose of the revision is to encourage more bilateral investments by lowering the withholding tax rates which are currently fixed at 15% for dividends (5% for qualifying companies), 10% for interest and 10% for royalties
It has been announced by the German Federal Ministry of Finance that negotiations are ongoing for a new protocol to the income and capital tax treaty of 21 July 1959 between Germany and France. Further details of the treaty will be reported subsequently.
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Finance Law 2006 published
The amending protocol to the France-US income and capital tax treaty of 31 August 1994 4 were submitted to the French Parliament on 14 December 2005.
Finance Bill for 2006 further details on measures for companies
The Protocol of 7 April 2004 to the France-Netherlands tax treaty, signed on 16 March 1973, entered into force on 24 July 2005. France notified the entry into force of the treaty by way of Decree 2005-1077 of 23 August 2005, published in Official Journal No. 203 of 1 September 2005. The treaty will generally apply retroactively to tax years or periods starting on or after 1 April 2004. The Protocol provides that the Netherlands maintains taxing rights with respect to KLM (Royal Dutch Airlines) after merger with Air France
Indian Tribunal rules domestic/foreign company classification under Indian tax legislation does not contravene non-discrimination clause of India-France treaty
The protocol, signed on 3 September 2002 to the France and Quebec income tax treaty (entente fiscale) of 1 September 1987, entered into force on 1 August 2005. The purpose of this protocol is to harmonize the France-Quebec treaty with the modifications made in the protocol signed on 30 November 1995 to the France-Canada treaty.
Court of Appeals of Paris decides on concept of beneficial owner under France-UK tax treaty
Interpretation of Art. 26(3) of FranceSpain tax treaty (MAP) exchange of letters published
The Bill on the promotion of investments in the French economy (projet de loi pour la confiance et modernisation de l'conomie) was approved by the French Parliament on 12 July 2005. The bill, amongst other provides for an Extension of the participation exemption
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