Key Benefits:
President of the Republic,
On the report of the Prime Minister and the Minister for Foreign and European Affairs,
Considering articles 52 to 55 of the Constitution;
Vu la Act No. 2009-1470 of 2 December 2009 authorizing the approval of the agreement between the Government of the French Republic and the Government of the United Kingdom of Great Britain and Northern Ireland with a view to avoiding double taxation and preventing tax evasion and fraud on income tax and capital gains (a protocol), signed in London on June 19, 2008;
Vu le Decree No. 53-192 of 14 March 1953 amended on the ratification and publication of international commitments undertaken by France,
Decrete:
The agreement between the Government of the French Republic and the Government of the United Kingdom of Great Britain and Northern Ireland to avoid double taxation and to prevent tax evasion and tax evasion in respect of income tax and capital gains (a whole protocol), signed in London on 19 June 2008, will be published in the Official Journal of the French Republic.
The Prime Minister and the Minister for Foreign and European Affairs are responsible, each with respect to him, for the implementation of this decree, which will be published in the Official Journal of the French Republic.
C O N V E N T I O N
BETWEEN THE GOVERNMENT OF THE FRANÇAISE REPUBLIC AND THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND IRELAND OF THE NORTH IN VUE OF IMPROVING IMPOSAL DOUBLES AND THE PREVENTION OF FISCAL FRAMEWORK
The Government of the French Republic
and
the Government of the United Kingdom of Great Britain and Northern Ireland,
Wishing to conclude a new Convention to avoid double taxation and to prevent tax evasion and tax evasion on income tax and capital gains,
agreed on the following provisions:
Article 1
Persons concerned
This Convention applies to persons who are residents of a Contracting State or both Contracting States.
Article 2
Taxes targeted
1. The taxes to which this Convention applies are:
(a) with regard to the United Kingdom:
(i) income tax (income tax);
(ii) corporate tax (corporation tax);
(iii) capital gains tax (tax capital gains);
(hereinafter referred to as "United Kingdom tax");
(b) in respect of France, all taxes collected on behalf of the State or its local authorities, regardless of the system of collection, total income or income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amount of wages paid by companies, and taxes on surplus-values, including:
(i) income tax;
(ii) corporate tax;
(iii) the social contribution on corporate tax;
(iv) the wage tax;
(v) widespread social contributions;
(vi) contributions for the reimbursement of social debt;
(hereinafter referred to as "French tax").
2. This Convention also applies to taxes of an identical or similar nature that would be established by one of the Contracting States after the date of signature of the Convention and which would be in addition to or replace the taxes referred to in paragraph 1. The competent authorities of the Contracting States shall communicate the significant changes to their respective tax laws.
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) the term "United Kingdom" means Great Britain and Northern Ireland and areas beyond the territorial sea on which the United Kingdom can, in accordance with international law, exercise its sovereign rights;
(b) the term "France" means the European and overseas departments of the French Republic including the territorial sea and, beyond that, the areas on which, in accordance with international law, the French Republic has sovereign rights and exercises its jurisdiction;
(c) the term "national" means:
(i) in the case of the United Kingdom, any British citizen or any British subject who does not have the citizenship of another Commonwealth country or territory if he or she has a right of residence in the United Kingdom;
(ii) in the case of France, any natural person who has French nationality;
(d) the terms "a Contracting State" and "the other Contracting State" shall, as appropriate, designate the United Kingdom or France;
(e) the term "person" includes natural persons, societies and all other groups of persons;
(f) the term "corporate" means any corporation, or entity that is considered, for taxation purposes, to be a corporation;
(g) the term "company" applies to the exercise of any business or business;
(h) the terms "company of a Contracting State" and "company of the other Contracting State" shall, respectively, designate a business operated by a resident of a Contracting State and a business operated by a resident of the other Contracting State;
(i) "international traffic" means any carriage by a ship, aircraft or railway vehicle operated by a resident of a Contracting State, except where the ship, aircraft or railway vehicle is operated only between points in the other Contracting State;
(j) the term "competent authority" means, in the case of the United Kingdom, directors of the administration of taxes and customs ("Commissioners for Her Majesty's and Customs") or their authorized representative and, in the case of France, the Minister of Finance or its authorized representative;
(k) the terms "activity", in relation to a business, and "business" include the exercise of liberal professions or other independent activities.
2. For the purposes of this Convention at any time by a Contracting State, any term or expression not defined therein shall, unless the context requires a different interpretation, the meaning assigned to it at that time by that State in respect of the taxes to which this Convention applies, the meaning assigned to that term or expression by the tax law of that State in respect of the meaning assigned to it by the other branches of the law of that State.
Article 4
Residence
1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is subject to tax on the basis of his domicile, residence, management seat, place of registration or any other criterion of a similar nature, and also applies to that State as well as to all its political subdivisions or local authorities, as well as to any person of that public authority, This term does not include persons who are subject to tax in that State only for income and capital gains from sources in that State.
2. Where, according to the provisions of paragraph 1, a natural person is a resident of the two Contracting States, his or her situation shall be settled as follows:
(a) that person is considered to be a resident only of the Contracting State where the person has a permanent home; if it has a permanent home in both states, it is considered to be a resident only of the State with which its personal and economic ties are the narrowest (centre of vital interests) ;
(b) if the Contracting State in which that person has the centre of its vital interests cannot be determined, or if it does not have a permanent home in any of the States, it is considered to be a resident only of the State in which it normally resides;
(c) if the person normally resides in the two Contracting States or if he or she does not normally reside in any of them, he or she is considered to be a resident only of the State of which he or she is a national;
(d) if that person has the nationality of the two Contracting States or if he or she does not have the nationality of any of them, the competent authorities of the States shall decide the question by mutual agreement.
3. Where, according to the provisions of paragraph 1, a person other than a natural person is a resident of the two Contracting States, it is considered to be a resident only of the State where its effective management seat is located.
4. The term "resident of a Contracting State" includes, where that Contracting State is France, any partnership, grouping of persons or other similar entity:
(a) the effective management seat in France;
(b) that is subject to tax in France; and
(c) all holders of shares, associates or members are, pursuant to French tax legislation, personally subject to tax on the basis of their share in the profits of such partnership, groupings of persons or other similar entities.
5. For the purposes of this Convention:
(a) an income, benefit or gain element:
(i) originating from a Contracting State through a partnership, a grouping of persons or other similar entity established in the other Contracting State; and
(ii) treated, under the tax legislation of that other Contracting State, as the income of beneficiaries, members or participants of that partnership, of that group of persons or of that other similar entity,
may benefit from the provisions of this Convention in the same way as if it was perceived directly by a beneficiary, member or participant of that partnership, of that group of persons or similar entity that is a resident of that other Contracting State, to the extent that such beneficiaries, members or participants, are residents of that other Contracting State and satisfy any other condition imposed by the Convention, whether that income is considered or not, under the tax legislation of the first Contracting State
(b) an income, benefit or gain element:
(i) originating from a Contracting State through a partnership, a grouping of persons or other similar entity established in the other Contracting State; and
(ii) treated, under the tax legislation of that other Contracting State, as the income of that partnership, that grouping of persons or that other similar entity,
may benefit from the provisions of this Convention in the same way as that of a resident of that other Contracting State, whether or not that income is considered, under the tax legislation of the first State, as the income of that "association", of that grouping of persons or of that other similar entity, provided that "association", that grouping of persons or that other similar entity is resident of that other Contracting State and satisfied with any other condition imposed by the Convention;
(c) an income, benefit or gain element:
(i) from a Contracting State through a partnership, a grouping of persons or any other similar entity established in that Contracting State;
(ii) treated, under the tax legislation of the other Contracting State, as the income of beneficiaries, members or participants of that partnership, of that group of persons or of that other similar entity; and
(iii) treated, in accordance with the tax legislation of the first State, as the income of this partnership, of this group of persons or of that other similar entity,
may be imposed without restriction pursuant to the tax legislation of the first State;
(d) an income, benefit or gain element:
(i) from a Contracting State through a partnership, a grouping of persons or other similar entity established in that Contracting State; and
(ii) treated, under the tax legislation of the other Contracting State, as the income of this "association", of that group of persons or of that other similar entity,
may not benefit from the provisions of this Convention;
(e) an income, benefit or gain element:
(i) from a Contracting State through a partnership, a grouping of persons or any other similar entity established in a State other than the Contracting States; and
(ii) treated, under the tax laws of the other Contracting State and the State in which the entity is established, such as the income of beneficiaries, members or participants of that partnership, of that group of persons or of that other similar entity,
may benefit from the provisions of this Convention in the same way as if it were perceived directly by a beneficiary, member or participant of that " partnership", of that group of persons or of that similar entity resident of that other Contracting State, to the extent that such beneficiaries, members or participants are residents of that other Contracting State and meet any other conditions imposed by the Convention, whether or not that income is considered under the tax law of the first Contracting State,
(f) an income, benefit or gain element:
(i) from a Contracting State through a partnership, a grouping of persons or any other similar entity established in a State other than the Contracting States; and
(ii) treated, under the tax legislation of the other Contracting State, as the income of this "association", of that group of persons or of that other similar entity,
shall not be entitled to the provisions of this Convention.
Article 5
Stable establishment
1. For the purposes of this Convention, the term "stable establishment" means a fixed business facility through which a company operates all or part of its business.
2. The term "stable establishment" includes:
(a) a steering seat;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop; and
(f) a mine, career or any other place of extraction of natural resources.
3. A construction or construction site is a permanent establishment only if its duration exceeds twelve months.
4. Notwithstanding the preceding provisions of this Article, it is considered that there is no "stable establishment" if:
(a) the use of facilities for the sole purpose of storage, exposure or delivery of goods owned by the company;
(b) goods belonging to the enterprise are stored for the sole purpose of storage, exposure or delivery;
(c) goods belonging to the enterprise are stored for the sole purpose of processing by another enterprise;
(d) a fixed business facility is used for the sole purpose of purchasing goods or collecting information for the company;
(e) a fixed business facility is used for the sole purpose of carrying out any other preparatory or auxiliary activity for the enterprise;
(f) a fixed business facility shall be used only for the purpose of the cumulative year of activities referred to in paragraphs (a) to (e) of this paragraph, provided that the overall activity of the fixed business facility resulting from this cumulative operation shall be pre-prepared or auxiliary.
5. Notwithstanding the provisions of paragraphs 1 and 2, where a person — other than an agent enjoying an independent status to which paragraph 6 applies — shall act on behalf of a business and shall have in a Contracting State powers that it normally exercise to enter into contracts on behalf of the undertaking, that undertaking shall be deemed to have a permanent establishment in that State for all activities that that that person exercises for the undertaking,
6. A business is not considered to have a permanent establishment in a Contracting State solely because it operates in it through a broker, a general commissioner or any other agent with an independent status, provided that such persons act within the ordinary framework of their business.
7. The fact that a corporation that is a resident of a Contracting State controls or is controlled by a corporation that is a resident of the other Contracting State or that operates therein (either through a permanent establishment or not) is not sufficient in itself to make any of these companies a permanent establishment of the other.
Article 6
Real estate income
1. Income from real property (including income from farms or forestry) located in a Contracting State may be taxed in that State.
2. The term "real property" has the meaning assigned to it by the law of the Contracting State in which the property is located. The term includes, in any case, accessories, dead or alive livestock of farms and forests, the rights to which the provisions of private law apply in respect of land ownership, the usufruct of real property and the rights to variable or fixed payments for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources; vessels, aircraft and railway vehicles are not considered real property.
3. The provisions of subsection 1 apply to revenues derived from direct exploitation, lease or charter, as well as any other form of exploitation of real property.
4. The provisions of paragraphs 1 and 3 also apply to income from real property of a business.
5. Where shares, shares or other rights in a corporation or other legal person, a " partnership", a "trust" or a comparable institution, give a right of enjoyment on real property located in a Contracting State and held by that corporation or other legal entity, that " partnership", "trust" or comparable institution, income derived from direct use, lease or use in any other form of that right of enjoyment shall be taxable in that non-obstructive State 7.
Article 7
Business benefits
1. The profits of an enterprise of a Contracting State shall be taxable only in that State, unless the enterprise carries on business in the other Contracting State through a permanent establishment located therein. If the company operates in such a way, the profits of the company are taxable in the other State but only to the extent that they are attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where a business of a Contracting State carries on business in the other Contracting State through a permanent establishment located therein, it shall be charged, in each Contracting State, to that permanent establishment the profits that it could have realized if it had constituted a separate undertaking carrying out identical or similar activities under identical or similar conditions and dealing independently with the enterprise of which it constitutes a permanent establishment.
3. In order to determine the benefits of a permanent establishment, deductions are made of the expenses incurred for the purposes of this permanent establishment, including the executive expenses and general administrative expenses so exposed, either in the State where the permanent establishment is located or elsewhere.
4. If it is customary in a Contracting State to determine the profits attributable to a permanent establishment on the basis of a distribution of the total profits of the enterprise between its various parties, no provision in paragraph 2 shall prevent that State from determining the taxable profits according to the distribution in use; However, the method of distribution adopted must be such that the result obtained is consistent with the principles contained in this article.
5. No profit is charged to a permanent establishment because it simply purchased goods for the company.
6. For the purposes of the preceding paragraphs, the benefits to be charged to the permanent establishment are determined annually on the same basis, unless there are valid and sufficient grounds to proceed otherwise.
7. Where profits include elements of income or capital gains, treated separately in other articles of this Convention, the provisions of these articles are not affected by the provisions of this article.
Article 8
International transport
1. The benefits derived by a resident of a Contracting State from the operation, in international traffic, of ships, aircraft or railway vehicles shall be taxable only in that State.
2. The profits referred to in paragraph 1 to a resident of a Contracting State for his participation in a grouping (pool), a joint operation or an international operating organization shall be taxable only in that State.
3. For the purposes of this section, profits derived from the operation, in international traffic, of ships, aircraft or railway vehicles shall include:
(a) benefits derived from the rental of vessels, aircraft or railway vehicles without personnel; and
(b) profits derived from the use, maintenance or rental of containers,
where such rental or use, maintenance or rental, as the case may be, is incidental to the operation, in international traffic, of ships, aircraft or railway vehicles.
Article 9
Tunnel under the Channel
1. In this article:
(a) the term "Treaty" means the Treaty between the United Kingdom of Great Britain and Northern Ireland and the French Republic concerning the construction and operation by private companies concessionaries of a fixed transmanche bond, signed at Cantorbéry on 12 February 1986;
(b) the term "fixed link" has the meaning given to it by article 1, paragraph 2, of the Treaty;
(c) the term "concession" means the concession concerning the design, financing, construction and operation of a fixed link through the Channel signed in Paris on 14 March 1986 between, on the one hand, the " Secretary of State for Transport" of the Government of the United Kingdom of Great Britain and Northern Ireland and the Minister of Planning, Housing and Transport representing the French State and, on the other hand, Limited the Channel
(d) the term "contributors" means the Channel Tunnel Group Limited and France-Manche SA or any legal entity to which one or the other company has granted or succeeded, in accordance with the provisions of the concession;
e) the term "mother companies" means:
(i) the resident corporation of the United Kingdom effectively owns all shares of the capital of the concessionaire that is a business of the United Kingdom; and
(ii) the resident company of France holding all the shares of the capital of the concessionaire which is a company of France with the exception of the shares obligatoryly held, in accordance with French commercial law, by other shareholders;
(f) the term "associated corporation" means:
(i) one or another of the parent companies; or
(ii) a corporation in which one of the concessionaires directly or indirectly has more than 50% of the voting rights or shares of the capital; or
(iii) a corporation in which one of the parent companies directly or indirectly owns more than 50% of the voting rights or shares of the capital;
(g) the term "capital shares" as used in paragraph (f) of this paragraph means:
(i) in the United Kingdom, all shares of the capital issued by the corporation, other than shares of the capital whose holders are entitled to a fixed dividend, excluding any other right to the profits of the corporation;
(ii) in France, all shares of the capital issued by the corporation, of which the holders have no special rights in the distribution of dividends or voting.
2. The provisions of this Article shall apply in respect of the taxation by the Contracting States of income from real property that is part of the fixed link and of profits derived from the construction and operation of the fixed link, notwithstanding the contrary provisions of Article 6, Article 7 or Article 8 of this Convention, provided that:
(a) one of the concessionaires is a business of a Contracting State and the other concessionaire is a business of the other Contracting State; and that
(b) the concession provides that the revenues and expenses shown shall be equally divided between the two concessionaires; and
(c) concessionaires effectively distribute expenditures and revenues by equal shares during the construction and operation of the fixed link.
3. For the purposes of their tax legislation, the Contracting States shall separately calculate the income or profits made by each of the concessionaires (directly or through a partnership constituted between them) in accordance with the principle that the expenses and revenues shared between them, in accordance with the provisions of paragraph 2 (c), have been exposed and realized by each of them equally.
4. If and as long as the holders of shares of one of the concessionaires or one of the parent companies are obliged to hold simultaneously an equivalent number of shares of the same nature of the other concessionaire or if that is the case of the other parent company, the income or profits of each concessionaire, calculated in accordance with the provisions of paragraph 3, shall be taxable only in the Contracting State of which it is a business.
5. If the condition in paragraph 4 is not fulfilled, the income or profits of each concessionaire, calculated in accordance with the provisions of paragraph 3, shall be attributed to a permanent establishment that a concessionaire has in the Contracting State of which he is not a business and shall be taxed accordingly.
6. (a) Notwithstanding the provisions of Article 15 of this Convention, wages, salaries and other similar remuneration, received by an employee of one of the concessionaires or of a associated company for employment exercised exclusively or principally within the fixed link and in the two contracting States, may be taxed in the Contracting State in which the effective management seat of that concessionaire or associated company is located;
(b) For the purposes of paragraph 2 of Article 15 of this Convention, remuneration may not be considered to be borne by a permanent establishment that a concessionaire has in the Contracting State of which he is not a company on the sole ground that there is a partnership between the two concessionaires.
Article 10
Associated companies
1. When:
(a) a business of a Contracting State directly or indirectly participates in the direction, control or capital of a business of the other Contracting State, or
(b) the same persons directly or indirectly participate in the direction, control or capital of a business of a Contracting State and a business of the other Contracting State,
and that, in both cases, both companies are, in their commercial or financial relations, bound by agreed or imposed conditions that differ from those that would be agreed between independent companies, the profits that, without these conditions, would have been realized by one of the companies but could not be in fact because of these conditions, may be included in the profits of that undertaking and imposed accordingly.
2. When a Contracting State includes in the profits of a company of that State ― and imposes accordingly ― profits on which a company of the other Contracting State has been imposed in that other State, and that the profits thus included are profits that would have been realized by the enterprise of the first State if the terms agreed between the two companies had been those that would have been agreed between independent enterprises, the other State shall make an appropriate adjustment to the amount of the amount of To determine this adjustment, the other provisions of this Convention shall be taken into account and, if necessary, the competent authorities of the Contracting States shall consult.
Article 11
Dividends
1. (a) Dividends from a Contracting State and paid to a resident of the other Contracting State shall be taxable in that other State.
(b) Subject to the provisions of paragraph (c) of this paragraph, the dividends referred to in paragraph (a) of this paragraph shall also be taxable in the first State, and in accordance with the law of that State, but if the person receiving them is the beneficial owner, the tax so charged shall not exceed 15% of the gross amount of the dividends.
(c) The dividends referred to in paragraph (a) of this paragraph paid by a corporation that is a resident of the first State shall not be taxable in that State if their beneficial owner is a corporation subject to tax on corporations that holds, directly or indirectly, at least 10% of the capital of the corporation paying the dividends and that is a resident of the other Contracting State.
(d) Notwithstanding the provisions of section 1, the tax levied in France on the dividends derived therefrom and the beneficial owner of which is a pension fund (other than a corporation) constituted, established and approved for tax purposes in the United Kingdom, cannot be determined at a rate exceeding that provided for in paragraph (b) of this paragraph.
(e) The provisions of this subsection do not affect the taxation of the corporation on profits that are used for the payment of dividends.
2. The term "dividends" used in this article refers to income from shares, shares or benefits, shares of mine, share of founder or other share of beneficiaries except for receivables, as well as income subject to the distribution regime by the tax legislation of the Contracting State whose distribution company is a resident. The term "dividends" does not include income referred to in section 16.
3. The provisions of paragraph 1 shall not apply where the beneficial owner of the dividends, a resident of a Contracting State, exercises in the other Contracting State whose dividend paying company is a resident an enterprise activity through a permanent establishment located therein, and that the dividend-generating interest is effectively connected to it. In this case, the provisions of Article 7 shall apply.
4. Where a corporation that is a resident of a Contracting State derives from the profits or income of the other Contracting State, that other State shall not collect any tax on the dividends paid by the corporation, except to the extent that such dividends are paid to a resident of that other State or to the extent that the dividend-generating interest is effectively connected to a permanent establishment located in that other State, or collect any tax, in respect of
5. The provisions of paragraph 1 (b), (c) and (d) do not apply to dividends paid from income or gains derived from real property within the meaning of section 6 by an investment vehicle:
(a) that distributes most of these revenues annually; and
(b) whose income or gains from these real property are exempt from tax;
where the beneficial owner of these dividends holds, directly or indirectly, 10% or more of the capital of the vehicle that pays the dividends. In this case, dividends are taxable at the rate prescribed by the national legislation of the Contracting State from which they arise.
6. The provisions of this Article shall not apply if the principal objective or any of the principal objectives of a person concerned by the formation or allocation of shares or other dividend-generating rights has been to take advantage of this Article through that constitution or assignment.
Article 12
Interest
1. Interest arising from a Contracting State and whose beneficial owner is a resident of the other Contracting State shall be taxable only in that other State.
2. The term "interest" used in this section refers to the income of receivables of any kind, whether or not accompanied by mortgage guarantees or an interest clause in the debtor's profits, including revenues from public funds and bonds of borrowing. The term "interest" does not include income deemed to be dividends under the provisions of Article 11.
3. The provisions of paragraph 1 shall not apply where the beneficial owner of the interest, a resident of a Contracting State, carries on in the other Contracting State in which the interest arises a business activity, through a permanent establishment located therein, and that the interest-generating debt is effectively connected to it. In this case, the provisions of Article 7 shall apply.
4. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of interest paid exceeds, for any reason, the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.
5. The provisions of this section shall not apply if the principal objective or any of the principal objectives of a person concerned by the establishment or allocation of interest-generating debt has been to take advantage of this section through that constitution or assignment.
Article 13
Claims
1. Royalties from a Contracting State and whose beneficial owner is a resident of the other Contracting State shall be taxable only in that other State.
2. The term " royalties" used in this article means the remuneration of any kind paid for the use or concession of the use of a copyright on a literary, artistic or scientific work including film films and software, a patent, a trademark or trade mark, a drawing or a model, a plan, a formula or an industrial process, or for an industrial process
3. The provisions of paragraph 1 shall not apply where the beneficial owner of the royalties, a resident of a Contracting State, carries on in the other Contracting State from which the royalties arise, an activity of enterprise through a permanent establishment located therein, and that the right or property that generates royalties is effectively connected to it. In this case, the provisions of Article 7 shall apply.
4. Where, because of special relations between the debtor and the beneficial owner or between the debtor and the other person maintain with third persons, the amount of royalties paid exceeds, for any reason, the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section shall apply only to the latter amount. In such cases, the surplus portion of the payments shall be taxable in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.
5. The provisions of this section shall not apply if the principal objective or any of the principal objectives of a person concerned by the constitution or allocation of the right or property that generates royalties has been to take advantage of this section through that constitution or assignment.
Article 14
Capital gains
1. Gains derived from the alienation of real property defined in Article 6 and located in a Contracting State may be taxed in that State.
2. Gains from the alienation:
(a) shares, other than actions that are the subject of regular negotiations on a regulated market, shares or rights derived from their value or most of their value, directly or indirectly, of real property referred to in Article 6 and located in a Contracting State, or
(b) rights in a partnership or a "trust" whose assets consist mainly of real property referred to in Article 6 and situated in a Contracting State, or shares, shares or rights referred to in paragraph (a) of this paragraph;
are taxable in the State where real property is located.
3. Gains derived from the alienation of movable property that are part of the assets of a permanent establishment that a business of a Contracting State has in the other Contracting State, including such gains arising from the alienation of that permanent establishment (on or with the whole enterprise), are taxable in that other State.
4. The gains derived by a resident of a Contracting State from the alienation of vessels, aircraft or railway vehicles operated by that resident in international traffic or of movable property assigned to the operation of such vessels, aircraft or railway vehicles shall be taxable only in that State.
5. Gains derived from the alienation of any property other than those referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the assignor is a resident.
6. The provisions of paragraph 5 shall not affect the right of a Contracting State to levy, in accordance with its legislation, a tax on gains derived from the alienation of any property by a person who is, and who has been at any time during the preceding six fiscal years, a resident of that Contracting State or a person who is a resident of that Contracting State at any time of the fiscal year in which the property is a person.
Article 15
Employment income
1. Subject to the provisions of Articles 16, 18, 19 and 20, wages, salaries and other similar remuneration that a resident of a Contracting State receives under an employee employment shall be taxable only in that State, unless employment is exercised in the other Contracting State. If the employment is exercised, the remuneration received as such is taxable in that other State.
2. Notwithstanding the provisions of paragraph 1, the remuneration of a resident of a Contracting State in respect of an employee employed in the other Contracting State shall be taxable only in the first State if:
(a) the beneficiary stays in the other State for a period or periods not exceeding a total of 183 days in any period of twelve consecutive months; and
(b) compensation shall be paid by an employer, or on behalf of an employer, who is not a resident of the other State; and
(c) the charge of remuneration is not borne by a permanent establishment that the employer has in the other State.
3. Notwithstanding the preceding provisions of this Article, remuneration for an employee employed on board a ship, aircraft or railway vehicle operated in international traffic shall be taxable in the Contracting State of which the operator of the ship, aircraft or railway vehicle is a resident.
4. For the purposes of the provisions of this Article, the term "employed employment" includes, inter alia, the functions of stewardship or management, other than the functions referred to in Article 16, carried out in a company subject to French tax on companies.
Article 16
Jetons of presence
Tokens of presence and other similar remuneration that a resident of a Contracting State receives as a member of the board of directors or supervision of a corporation that is a resident of the other Contracting State may be taxed in that other State.
Article 17
Artists and athletes
1. Notwithstanding the provisions of Articles 7 and 15, income derived by a resident of a Contracting State from his or her personal activities carried out in the other Contracting State as an artist of the spectacle, such as a theatre, cinema, radio or television artist, or a musician, or as a sportsman, may be taxed in that other State.
2. Where the income of activities that an entertainer or a sportsperson exercises personally and in this capacity is attributed not to the artist or to the athlete himself but to another person, such income shall be taxable, notwithstanding the provisions of Articles 7, 13, 15 and 23, in the Contracting State where the activities of the artist or athlete are carried out.
3. Notwithstanding the provisions of paragraph 1, the income derived by a resident of a Contracting State from his or her personal activities carried out in the other Contracting State as an artist or sportsman shall be taxable only in the first State when such activities in the other State are financed primarily by public funds of the first State or its local authorities, or their legal persons of public law.
4. Notwithstanding the provisions of paragraph 2, where the income of activities that a resident of a Contracting State, an artist or a sportsman, exercises personally and in that capacity in the other Contracting State shall be attributed not to the artist or to the athlete himself but to another person, such income shall not be taxable, notwithstanding the provisions of Articles 7 and 15, except in the first State where that other person is financed principally by public funds of that first State or
Article 18
Pensions
Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State for an earlier job shall be taxable only in that State.
Article 19
Public functions
1. Salaries, salaries and other similar remuneration, other than pensions, paid by a Contracting State or one of its local authorities or by one of their legal persons of public law, to a natural person for services rendered to that State, community or legal person shall be taxable only in that State. However, such wages, salaries and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and if the natural person is a resident of that State and has its nationality without at the same time having the nationality of the first State.
2. Pensions and other similar remuneration, paid by a Contracting State or one of its local authorities or, in the case of France, by a legal person of public law, either directly or by debit of funds they have constituted, to a natural person for services rendered to that State, community or legal person shall be taxable only in that State. However, such pensions shall be taxable only in the other Contracting State if the natural person is a resident of that State and has its nationality without at the same time having the nationality of the first State.
3. The provisions of Articles 15, 16, 17 and 18 apply to salaries, salaries and other similar remuneration and pensions, paid for services rendered in the course of an activity carried out by a Contracting State or one of its local authorities or by one of their legal persons of public law.
4. Notwithstanding any other provision of this Convention:
(a) pensions referred to in article 81, paragraph 4, of the General Code of French Taxes are exempt from UK tax, regardless of the nationality of the pensioner, provided that they are exempt from French tax;
(b) pensions referred to in section 641(1) (a) to (g) of the Income Tax Act, 2003 (Earnings and Pensions) Act 2003", benefits paid in the event of illness or accident after the termination of services in the armed forces or reserve forces, referred to in section 641(1) (h) of the 2003 Act referred to above and pensions for injury or disability payable under any scheme under the 1939 Personal Injuries (Emergency Provisions) Act Act 1939" is exempt from French tax, regardless of the nationality of the pensioner, provided that they are exempt from UK tax. However, the provisions of paragraph 2 apply to the portion of these pensions that is not exempt from UK tax.
Rule 20
Teachers and researchers
1. Subject to the provisions of paragraph 2, a natural person who resides in a Contracting State for a period not exceeding two years, in order to carry out educational or research activities at a university, college, school or any other educational institution officially recognized in that Contracting State, and who was immediately before that stay a resident of the other Contracting State, shall be taxable only in that other State in respect of remuneration arising from such activities
2. Where, in accordance with the combined provisions of this Convention and the legislation in force in the other State, a teacher or researcher referred to in paragraph 1 shall be exempt from tax in that other State in respect of his remuneration, such remuneration shall be taxable in the first State.
3. The provisions of this section apply to revenues from research activities only if they are undertaken by the natural person in the public interest and not primarily for the benefit of one or more other specified persons.
Article 21
Students
A student or trainee who is or was immediately before going to a Contracting State a resident of the other Contracting State, and who stays in the first State for the sole purpose of continuing his or her studies or training, is not taxable in that first State on the amounts that he or she receives to cover his or her maintenance, education or training expenses, provided that these amounts come from sources outside that State.
Article 22
Activities at sea
1. The provisions of this Article shall apply notwithstanding any other provision of this Convention.
2. A business of a Contracting State which carries out in the other Contracting State activities at sea related to the exploration or exploitation of the bed of the sea, the marine subsoil and their natural resources in areas located, in accordance with international law, under the jurisdiction of the other Contracting State, is, subject to the provisions of paragraphs 3 and 4, considered, for such activities, as carrying on its activity in the other Contracting State by the
3. The provisions of paragraph 2 shall not apply where the activities referred to therein are carried out in the areas referred to in the same paragraph for a period not exceeding a total of thirty days in any twelve-month period. However, for the purposes of this paragraph:
(a) where a company operating in the areas referred to in paragraph 2 is associated with another undertaking engaged in activities of a substantially similar nature, the first undertaking shall be deemed to carry out all activities of that nature of the second undertaking except to the extent that such activities are carried out together with its own activities;
(b) a business is considered to be associated with another business if one of them is directly or indirectly controlled by the other or if both are directly or indirectly controlled by one or more third parties.
4. The profits that a resident of a Contracting State derives from the transport of supplies or personnel to the place where activities related to the exploration or exploitation of the seabed, the marine basement and their natural resources are carried out in areas under the jurisdiction of a Contracting State, or that it derives from the exploitation of tugs and similar vessels in the context of such activities, shall be taxable only
Article 23
Other income
1. The income elements of a resident of a Contracting State whose resident is the beneficial owner from whom they arise, which are not dealt with in the preceding articles of this Convention and which are not incomes of "trusts" or estates in liquidation, shall be taxable only in that State.
2. The provisions of paragraph 1 shall not apply to income other than income derived from real property as defined in paragraph 2 of Article 6, where the beneficial owner of such income, a resident of a Contracting State, carries on business activity in the other Contracting State through a permanent establishment located therein, and that the right or property generating income is effectively connected to it. In this case, the provisions of Article 7 shall apply.
3. Where, because of special relations between the debtor and the beneficial owner of the income referred to in this Article and arising from a Contracting State, or between the debtor and the other person, the amount of such income exceeds, for any reason, the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of paragraphs 1 and 2 apply only to that latter amount. In such cases, the surplus portion of the income shall be taxable according to the laws of each Contracting State and taking into account the other provisions of this Convention.
4. The provisions of this section shall not apply if the main objective or purpose of a person concerned by the constitution or allocation of income-generating rights has been to take advantage of this section through that constitution or assignment.
Article 24
Elimination of double taxation
1. Subject to the provisions of the United Kingdom's legislation concerning the granting of a deductible credit from the United Kingdom's tax under a tax payable in a territory outside the United Kingdom (which cannot affect the general principles here laid):
(a) the French tax payable under French legislation and in accordance with the provisions of this Convention, directly or by deduction, on income, profits or taxable earnings of French source (with the exception, with respect to dividends, of the tax payable on profits on which dividends have been paid) is considered to be a deductible credit of any tax of the United Kingdom calculated on the same profits,
(b) in the case of dividends paid by a resident corporation of France to a resident corporation of the United Kingdom and which directly or indirectly controls at least 10% of the voting rights in the corporation that pays the dividends, the credit shall take into account (in addition to any French tax that constitutes a deductible credit under the provisions of paragraph (a) of the French tax due by the corporation for profits that are used for the payment of the dividends.
2. For the purposes of the provisions of paragraph 1:
(a) the profits, income and capital gains received by a resident of the United Kingdom that are taxable in France, in accordance with other articles of this Convention (with the exception of capital gains that are taxable in accordance with paragraph 6 of Article 14 shall be deemed to have their source in France;
(b) capital gains not sourced in France or the United Kingdom that are taxable in the United Kingdom in accordance with the provisions of paragraph 6 of Article 14 shall be deemed to have their source in France;
(c) the taxes referred to in paragraphs (i) to (iv) of paragraph 1 (b) of Article 2 and, with respect to the taxes referred to in the above-mentioned points, in paragraph 2 of Article 2, shall be deemed to be French taxes.
3. With regard to France, double taxation is eliminated as follows:
(a) notwithstanding any other provision of this Convention, income that is taxable or taxable only in the United Kingdom in accordance with the provisions of this Convention shall be taken into account in computing French tax when it is not exempt from corporate tax under French domestic law. In this case, the UK's tax is not deductible from these revenues, but the resident of France is entitled, subject to the conditions and limits set out in subparagraphs (i) and (ii) and paragraph 4, to a tax credit attributable to French tax. This tax credit is equal to:
(i) for income not referred to in paragraph (ii) to the amount of the French tax corresponding to those revenues provided that the resident of France is subject to the United Kingdom's tax on the basis of such income;
(ii) for income subject to tax on corporations referred to in Article 7 and Article 14, paragraph 3, and for income referred to in Article 11, paragraphs 1, 2 and 6 of Article 14, paragraph 3 of Article 15, Article 16, paragraphs 1 and 2 of Article 17 and Article 23, paragraph 3, to the amount of tax paid to the United Kingdom in accordance with the provisions of those sections; However, this tax credit cannot exceed the amount of the French tax corresponding to these revenues;
(b) for the purposes of paragraph (a) of this paragraph, the term "the amount of the French tax corresponding to that income" means:
(i) where the tax due to these revenues is calculated by applying a proportional rate, the proceeds of the amount of the net income considered by the rate that is actually applied to them;
(ii) where the tax due to these revenues is calculated by application of a progressive scale, the proceeds of the amount of the net income considered by the rate resulting from the ratio of the tax actually due to the total net income taxable under French law and the amount of that overall net income.
(c) for the purposes of paragraph (a) of this paragraph, the term "tax amount paid to the United Kingdom" means the amount of the tax actually borne by the United Kingdom on a final basis on the basis of the income considered in accordance with the provisions of this Convention.
4. (a) Where gains may be imposed by a Contracting State only in accordance with the provisions of paragraph 6 of Article 14, it is up to that Contracting State, and not to the other Contracting State, to eliminate double taxation in accordance with the methods set out in this Article, as if the gains came from sources located in the other Contracting State.
(b) Where gains may be imposed by a Contracting State under the provisions of paragraphs 1, 2 or 3 of Article 14, the other Contracting State, and not the first Contracting State, shall have the right to eliminate double taxation in accordance with the methods set out in this Article.
5. In paragraph 3, the term "income" means, depending on the context, income or capital gains.
Rule 25
Non-discrimination
1. Individuals possessing the nationality of a Contracting State shall not be subject in the other Contracting State to any taxation or obligation relating thereto, which is other or heavier than those to which or may be subject the natural persons possessing the nationality of that other State who are in the same situation in particular in respect of the residence.
2. The imposition of a permanent establishment that a business of a Contracting State has in the other Contracting State is not established in that other State in a less favourable manner than the taxation of the enterprises of that other State that exercise the same activity.
3. Unless the provisions of paragraph 1 of Article 10, paragraphs 4 or 5 of Article 12, paragraphs 4 or 5 of Article 13 or paragraphs 3 or 4 of Article 23 are applicable, the interests, royalties and other expenses paid by a company of a Contracting State to a resident of the other Contracting State shall be deductible, for the determination of the taxable profits of that undertaking, under the same conditions as if the first
4. The undertakings of a Contracting State whose capital is wholly or partly, directly or indirectly, held or controlled by one or more residents of the other Contracting State, shall not be subject in the first State to any taxation or relative obligation thereto, which is other or heavier than those to which other similar enterprises of the first State are or may be subject.
5. No provision of this Article shall be deemed to oblige any of the Contracting States to grant personal deductions, discounts or reductions granted for the purposes of taxation to natural persons who are not residents of that State.
6. When a natural person is employed in a Contracting State, contributions to a pension plan established and tax-recognized in the other Contracting State which are borne by that person shall be deductible in the first State for the determination of his taxable income, and shall be treated in that State in the same manner, and subject to the same conditions and restrictions, as contributions to a tax-retirement plan recognized in that State, if:
(a) that person was not a resident of that State and was a contributor to the pension plan under consideration, or to another pension plan to which he replaced, immediately before beginning employment in that State; and
(b) the pension plan shall be accepted by the competent authority of that State as a general correspondent for a tax-retirement plan recognized in that State.
7. Where a company that pays the remuneration of a natural person within the meaning of subsection 6 pays contributions to a pension plan referred to in that subsection, such contributions are not treated as a taxable income of that natural person and are admitted as a deduction for the calculation of the profits of the business.
8. For the purposes of paragraph 6:
(a) the term "retirement plan" means a plan to which the natural person participates in order to benefit from pension benefits payable under his or her employment; and
(b) a pension plan shall be tax-recognized in a State if the contributions to this plan give the right to tax relief in that State.
Rule 26
Friendly procedure
1. Where a resident of a Contracting State considers that the measures taken by a Contracting State or by the two Contracting States shall entail or result in an imposition not in accordance with the provisions of this Convention, it may, irrespective of the remedies provided by the domestic law of those States, submit its case to the competent authority of the State of which it is a resident or, if its case falls under paragraph 1 of Article 25, to that of the Contracting State of which it has the nationality. The case shall be submitted within three years after the first notification of the measure that results in taxation not in accordance with the provisions of this Convention or within six years after the end of the fiscal year or of the taxation period under which that taxation is established or proposed.
2. The competent authority shall endeavour, if the claim appears to it to be justified and if it is not itself in a position to provide a satisfactory solution, to resolve the case by amicable agreement with the competent authority of the other Contracting State, with a view to avoiding taxation not in conformity with this Convention. The agreement shall be applied irrespective of the time limits provided by the domestic law of the Contracting States.
3. The competent authorities of the Contracting States shall endeavour, by mutual agreement, to resolve the difficulties or to dispel the doubts to which the interpretation or application of this Convention may take place. They may also work together to eliminate double taxation in cases not provided for in the Convention.
4. The competent authorities of the Contracting States may communicate directly with each other in order to reach an agreement as indicated in the preceding paragraphs.
5. When
(a) in accordance with the provisions of paragraph 1, a person has submitted his case to the competent authority of a Contracting State on the ground that measures taken by a Contracting State or by the two Contracting States have resulted in an imposition not in conformity with the provisions of this Convention; and that
(b) the competent authorities are not in a position to conclude an agreement in order to resolve the case in accordance with the provisions of paragraph 2 within two years from the submission of the case to the competent authority of the other Contracting State,
all outstanding issues arising out of this case are subject to arbitration at the request of the person. However, these unresolved issues are not subject to arbitration when a decision concerning them has already been made by a court or administrative tribunal of one of the States or when the case has been submitted to one of the competent authorities pursuant to the provisions of the European Convention of 23 July 1990 on the elimination of double taxation in the event of a correction of the profits of associated companies. Unless a person directly concerned by the case does not accept the amicable agreement implementing the arbitration decision, it shall apply to the two contracting States and shall be applied irrespective of the time limits provided by the domestic law of those States. The competent authorities of the Contracting States shall establish by mutual agreement the terms and conditions for the application of this paragraph.
Rule 27
Exchange of information
1. The competent authorities of the Contracting States shall exchange the information likely to be relevant to the application of the provisions of this Convention or for the administration or application of the domestic legislation of the Contracting States relating to the taxation of any kind or denomination, perceived on behalf of the Contracting States, their political subdivisions or their local authorities, to the extent that the taxation they provide is not contrary to this Convention, in particular in order to prevent tax evasion and to facilitate legal evasion The exchange of information is not restricted by sections 1 and 2.
2. The information received under paragraph 1 by a Contracting State shall be kept secret in the same manner as the information obtained pursuant to the domestic legislation of that State and shall be communicated only to the persons or authorities (including the courts and administrative bodies) concerned by the establishment or collection of the taxes referred to in paragraph 1, by the procedures or prosecutions relating to such taxes, by the decisions on remedies relating to such taxes, or by the control of the above. These individuals or authorities only use this information for these purposes. They may disclose this information in public court hearings or judgments.
3. In no case shall the provisions of paragraphs 1 and 2 be construed as imposing on a Contracting State the obligation:
(a) take administrative measures derogating from its legislation and administrative practice or those of the other Contracting State;
(b) provide information that could not be obtained on the basis of its legislation or in the course of its normal administrative practice or those of the other Contracting State;
(c) provide information that would reveal a commercial, industrial, professional or commercial secret or information that would be contrary to public order.
4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use the powers available to it to obtain the information requested, even if it does not need it for its own tax purposes. The obligation contained in the previous sentence shall be subject to the limitations provided for in paragraph 3, unless such limitations are likely to prevent a Contracting State from transmitting information solely because they do not have an interest in it in the national context.
5. In no case shall the provisions of paragraph 3 be construed as permitting a Contracting State to refuse to disclose information solely because the information is held by a bank, other financial institution, an agent or a person acting as an agent or trustee or because that information relates to the property rights of a person.
Rule 28
Diplomatic and consular officials
1. The provisions of this Convention shall not affect the tax privileges enjoyed by members of diplomatic missions and their private domestic staff, members of consular posts or members of permanent missions to international organizations under either the general rules of international law or the provisions of special agreements.
2. This Convention shall not apply to international organizations, their organs or officials, or to persons who are members of a diplomatic mission, consular post or permanent delegation of a third State, when they are in the territory of a Contracting State and are not subject to the same obligations in respect of taxes on all their income and capital gains, as in one of the Contracting States.
Rule 29
Special provisions
1. Where, in accordance with the provisions of this Convention, an income shall be taxed in a Contracting State, and that, pursuant to the domestic legislation in force in the other Contracting State, a person shall be taxed only on the amount of that income that is transferred or received in that other Contracting State and not on its total amount, the tax benefit granted in the first State in accordance with the provisions of this Convention shall apply only to the share. This provision is not applicable to revenues under sections 7 and 11.
2. Where, pursuant to the provisions of Article 14, gains shall be taxable only in one of the Contracting States and only in accordance with the domestic legislation in force in that State a person shall be subject to tax on the amount of such gains that is transferred or received in that State and not on their total amount, the exemption that shall be granted, under that Article, by the other Contracting State only applies to the share
3. Notwithstanding the provisions of paragraph 1 (b) of section 2, for taxation under the solidarity tax on the property of a natural person who is a resident of France and who has the nationality of the United Kingdom without having at the same time French nationality, the property located outside France that that person has on January 1 of each of the five calendar years following that in which he or she becomes a resident of France shall not be held in those years. If this person loses the status of a resident of France for a period of not less than three years, then returns to a resident of France, the property located outside France that this person has on January 1 of each of the five calendar years following that in which he or she returns a resident of France does not enter the tax base for each of these five years.
Rule 30
Application methods
1. The competent authorities of the Contracting States may determine the modalities for the application of this Convention.
2. Any person seeking the benefits provided for in this Convention in a Contracting State shall submit to the tax administration of that State:
(a) a statement, in the form required by the tax administration, giving any indication of income or capital gains, including their amount or value, for which benefits are sought;
(b) a certificate from the tax administration of the other Contracting State confirming that the applicant is or was, during the period on which the application is made, a resident of that other Contracting State for the purposes of this Convention; and
(c) any other supporting documentation that the competent authority of the first Contracting State may require, in accordance with its domestic legislation, to process the application.
Rule 31
Entry into force
1. Each Contracting State shall notify the other of the procedures required by its legislation for the entry into force of this Convention. The latter shall enter into force on the day on which the last notification is received.
2. The provisions of this Convention shall apply:
(a) United Kingdom:
(i) in respect of income tax and capital gains tax, in any taxation year beginning on April 6, or after April 6, of the calendar year immediately following that in which the Convention entered into force;
(ii) in respect of corporate tax, any fiscal year beginning on 1 April, or after 1 April, of the calendar year immediately following that in which the Convention entered into force;
(b) in France:
(i) in respect of income taxes collected by deduction to the source, taxable after the calendar year in which the Convention entered into force;
(ii) in respect of income taxes that are not collected by way of deduction from the source, the related income, as appropriate, in any calendar year or year beginning after the calendar year in which the Convention entered into force;
(iii) in respect of the solidarity tax on the property referred to in article 29, paragraph 3, to the taxation of which the fact-generating act will take place after the calendar year in which this Convention has entered into force.
3. Notwithstanding the provisions of paragraph 2, the provisions of section 9 shall apply:
(a) in France, any calendar year or exercise beginning on or after 1 January 1994;
(b) in the United Kingdom, at any taxation period beginning on or after April 1, 1994.
4. The Convention between the Government of the French Republic and the Government of the United Kingdom of Great Britain and Northern Ireland, signed in London on 22 May 1968 and amended by the four amendments signed in London on 10 February 1971, on 14 May 1973, 12 June 1986 and 15 October 1987 ("the previous Convention"), will be repealed and will cease to have effect from the date on which this Convention applies in respect of the provisions of this Convention with respect to 15 October 1987. With respect to dividend tax credits paid by corporations resident in the United Kingdom, the previous Convention will cease to have effect from the date on which this Convention comes into force.
Rule 32
Denunciation
This Convention shall remain in force until it has been denounced by one of the Contracting States. Each Contracting State may denounce it by diplomatic means at least six months before the end of any calendar year after the entry into force. In this case, the Convention will no longer apply:
(a) United Kingdom:
(i) in respect of income tax and capital gains tax, in any taxation year beginning on April 6, or after April 6, of the calendar year immediately following that in which the denunciation was notified;
(ii) in respect of corporate tax, in any fiscal year beginning on April 1, or after April 1, of the calendar year immediately following that in which the denunciation was notified;
(b) in France:
(i) in respect of income taxes collected by deduction to the source, taxable after the calendar year in which the denunciation has been notified;
(ii) in respect of income taxes that are not collected by deduction from the source, the related income, as appropriate, in any calendar year or in any fiscal year beginning after the calendar year in which the denunciation has been notified;
(iii) in respect of the solidarity tax on the property referred to in section 29, paragraph 3, to the taxation of which the fact-generating act will intervene after the calendar year in which the denunciation has been notified.
In faith, the undersigned, duly authorized by their respective Governments, have signed this Convention.
Done in London on 19 June 2008, in duplicate, in French and English, both texts being equally authentic.
For the Government
of the French Republic
Christine Lagarde
Minister of Economy,
Finance and Employment
For the Government
of the United Kingdom
of Great Britain
and Northern Ireland
David Miliband
Minister of Foreign Affairs
and the Commonwealth
PROTOCOLE
When signing the Convention between the Government of the French Republic and the Government of the United Kingdom of Great Britain and Northern Ireland with a view to avoiding double taxation and preventing tax evasion and fraud on income and capital gains taxes, the Government of the French Republic and the Government of the United Kingdom of Great Britain and Northern Ireland have agreed that the following provisions are an integral part of the Convention.
1. With respect to section 2, it is understood that the wage tax referred to in paragraph 1 (b) of section 2 is governed by the provisions of the Convention applicable to business profits.
2. With respect to Article 3, it is understood that the term "United Kingdom" as defined in Article 3, paragraph 1, does not include the Anglo-Norman Islands, the Isle of Man, Gibraltar, the United Kingdom areas in Cyprus known as the Sovereign Base Areas, nor any overseas country or territory having special relations with the United Kingdom.
3. With respect to Article 5, it is understood that where a "association" that is not a resident of a Contracting State has a permanent establishment in a Contracting State, that permanent establishment is considered to be a permanent establishment located in that State of each of its associates or members who may benefit from the provisions of the Convention. Revenues or gains attributable to a permanent establishment that a "partner" that is not a resident of a Contracting State has in a Contracting State shall be deemed to be attributable to a permanent establishment that each of its associates or members has in that State on the basis of such income or gains that are to each partner or member of the "partner" that may benefit from the provisions of the Convention.
4. With respect to Article 6, it is understood that the term "real property" as defined in Article 6 includes options, promises of sale and similar rights relating to real property.
5. With respect to Article 7, it is understood that, where a resident of a Contracting State is associated with or a member of a "partner" established under the law of the other Contracting State, no provision of the Convention shall prevent the first Contracting State from imposing that resident on its share of income, profits or gains derived from or through that "partnership"; these revenues, profits or gains are, however, considered income, profits or gains from sources in that other State for the purposes of Article 24.
6. With respect to Article 11, it is understood that where a Contracting State applies to the permanent establishment of an entity established in the other Contracting State the exemptions provided for in its domestic law for the investment vehicles referred to in Article 11, paragraph 5, no provision of this Convention shall limit the right of the first Contracting State to impose, in accordance with its domestic legislation, the immovable income deemed to be distributed by that permanent establishment.
7. With respect to Articles 11, 12, 13, it is understood that the directors of companies or investment funds established in a Contracting State may submit an application relating to the benefits provided by the provisions of these Articles. In the case of companies or investment funds that do not fall within the scope of Article 1, leaders may submit applications and the competent authorities will agree on the terms and conditions for the application of this Convention to such requests.
8. With respect to articles 12, 13 and 23, it is understood that where, under the provisions of paragraph 5 of Article 12, paragraph 5 of Article 13 or paragraph 4 of Article 23, the provisions of the Article shall not apply to an element of income, it shall be taxable in both Contracting States in accordance with their domestic legislation.
Done in Paris, January 7, 2010.
Nicolas Sarkozy
By the President of the Republic:
The Prime Minister,
François Fillon
Minister for Foreign Affairs
and European,
Bernard Kouchner
