Roche & Cie

France / Luxembourg Tax Convention

21 Mar 2016

On March 19, a decree of March 17, 2016 was published in the Official Journal publishing the fourth amendment to the agreement between France and the Grand Duchy of Luxembourg for the avoidance of double taxation and establishing rules for mutual administrative assistance with respect to taxes on income and on capital.

Article 1 of the 4th amendment completes the Article 3 of the Convention by a paragraph which aims to transfer to companies in real estate oriented to the principle of taxation in the country of location of the building.

“Gains from the alienation of shares, units or other rights in a company, trust or any other institution or entity with assets or property comprise over 50% of their value or derive more 50% of their value – directly or indirectly through the interposition of one or more corporations, trusts, institutions or entities – from immovable property situated in a Contracting State or of rights in such property shall be taxable only in that State”

It is stated that “are not considered immovable property used by such company in its own business activity” and that these provisions also apply to “the transfer by an undertaking of such shares or other rights”

Consult the decree n° 2016-321 of the 17 march 2016cJORF n°0067 of the 19 march 2016

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