A pending Protocol, that would amend the income tax treaty between Luxembourg and France, may not be effective until 2017.
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.
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%.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.