Luxembourg: Status of ratification of Protocol with France

Luxembourg: Status of Protocol with France

A pending Protocol, that would amend the income tax treaty between Luxembourg and France, may not be effective until 2017.

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Ratification pending

The Luxembourg Parliament passed a bill to ratify the fourth Protocol to the income tax treaty (1958) between Luxembourg and France. However, it currently appears that the ratification process in France may not be completed before 10 December 2015. As a result, the Protocol would not be effective 1 January 2016. If ratification is eventually completed after 10 December 2015, according to the Protocol’s provisions, the Protocol would be effective 1 January 2017.

Provision in Protocol

A measure in the Protocol would end potential “double non-taxation” by granting France the right to tax on capital gains realized by Luxembourg companies on the direct or indirect sale of shares in French real estate companies, including shares in sociétés civiles immobilières (SCIs), the value of which is composed by real estate properties located in France for more than 50%.

 

Read a November 2015 report prepared by the KPMG member firm in Luxembourg: France-Luxembourg Double Tax Treaty Protocol

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