Key Benefits:
President of the Republic,
On the report of the Prime Minister and the Minister for Foreign Affairs and International Development,
Considering the Constitution, in particular articles 52 to 55;
Vu la Act No. 2015-279 of 13 March 2015 authorizing the approval of the agreement between the Government of the French Republic and the Government of the Principality of Andorra with a view to avoiding double taxation and preventing tax evasion and fraud in income tax;
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 Principality of Andorra with a view to avoiding double taxation and preventing tax evasion and tax evasion in respect of income tax (as a whole protocol), signed in Paris on 2 April 2013, will be published in the Official Journal of the French Republic.
The Prime Minister and the Minister for Foreign Affairs and International Development are responsible, each with respect to him, for the execution of this decree, which will be published in the Official Journal of the French Republic.
CONVENTION
ENTER THE GOVERNMENT OF THE FRANÇAISE REPUBLIC AND THE GOVERNMENT OF THE PRINCIPLE OF OVERVIEW OF IMPOSIBLE DOUBLES AND THE PREVENTION OF FISCAL EVASION AND FRENCH ON THE FRENCH (ENSEMBLE A PROTOCOL)
The Government of the French Republic and the Government of the Principality of Andorra,
Desirous of concluding a Convention to avoid double taxation and to prevent tax evasion and tax evasion on income tax,
The following provisions were agreed:
Article 1
Target persons
This Convention applies to persons who are residents of a Contracting State or both Contracting States.
Article 2
Taxes targeted
1. This Convention applies to income taxes collected on behalf of a Contracting State or its territorial authorities, irrespective of the system of collection.
2. Income taxes, taxes on total income or income elements, including taxes on gains from the alienation of movable or real property, taxes on the total amount of wages paid by businesses, and taxes on surplus-values.
3. The current taxes to which the Convention applies are:
(a) with regard to France:
(i) income tax;
(ii) corporate tax;
(iii) corporate tax contributions (hereinafter referred to as "French tax");
(b) Andorra:
(i) corporate tax;
(ii) the income tax of economic activities;
(iii) non-resident income tax;
(iv) tax on surplus-values of real estate heritage transmissions;
(hereinafter referred to as "Andoran tax").
4. The Convention also applies to taxes of an identical or similar nature that would be established after the date of signature of the Convention and that would be in addition to or replace existing taxes. The competent authorities of the Contracting States shall communicate the significant changes to their tax laws.
Article 3
General definitions
1. For the purposes of this Convention, unless the context requires a different interpretation:
(a) the terms "contracting State" and "other Contracting State" shall, as appropriate, designate France or Andorra;
(b) the term "France" means the European and overseas departments of the French Republic, including the territorial sea, and beyond it the zones on which, in accordance with international law, the French Republic has sovereign rights and exercises its jurisdiction;
(c) the term " Andorra" means the territory of the Principality of Andorra;
(d) the term "person" includes natural persons, societies and all other groups of persons;
(e) the term "corporate" means any corporation, or entity that is considered to be a corporation for taxation purposes;
(f) the term "company" applies to the exercise of any business or business;
(g) 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;
(h) the term "international traffic" means any transport by an aircraft operated by an enterprise whose effective steering seat is located in a Contracting State, except where the aircraft is operated only between points in the other Contracting State;
(i) the term "competent authority" means:
(i) in the case of France, the Minister for Finance or his authorized representative;
(ii) in the case of Andorra, the Minister of Finance or his authorized representative;
(j) the term "national" in respect of a Contracting State means any natural person who has the nationality of that Contracting State;
(k) the terms "activity" for a business, and "business" include the exercise of liberal professions or other independent activities.
2. For the application of the Convention at any time by a Contracting State, any term or expression not defined therein has, unless the context requires a different interpretation, the meaning assigned to it by that State at that time, the right of that State to the taxes to which the Convention applies, the meaning assigned to that term or that expression by the tax law of that State prevalent to the meaning assigned to it by the other branches of the law of that State.
Article 4
Resident
1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the legislation in force of that State, is subject to tax in that State, because of his domicile, residence, office of management, place of registration or any other criterion of a similar nature and also applies to that State as well as to all its territorial authorities and to legal persons of public law. However, this term does not include persons who are subject to tax in that State only for income 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 State where it 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 State where 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 where it normally resides;
(c) if the person normally stays in both States or if he or she does not normally stay 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 the person possesses the nationality of the two States or has no nationality of any of them, the competent authorities of the Contracting 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. Not considered to be a resident of a Contracting State within the meaning of this Article a person who, while meeting the definition of paragraphs 1, 2, 3 and 4 above, is only the apparent beneficiary of the income, the said income actually benefiting either directly or indirectly through other natural or legal persons, to a person who cannot be viewed as a resident of that State within the meaning of this Article.
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;
(f) a mine, oil or gas well, a career or any other place of extraction of natural resources;
(g) an agricultural, livestock or forestry operation.
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 for the purposes of the cumulative year of activities referred to in subparagraphs (a) to (e), provided that the overall activity of the fixed business facility resulting from this accumulated business shall be preparatory 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 enterprise, that undertaking shall be deemed to have a permanent establishment in that State for all activities that that that person exercises for the enterprise, unless
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. The income that a resident of a Contracting State derives from real property (including income from farms or forestry) located in the other Contracting State, is taxable in that other 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, 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, trust or any other institution or entity give the enjoyment of real property situated in a Contracting State and held by that corporation, trust, institution or entity, income derived from direct use, lease or use in any other form of that right of enjoyment shall be taxable in that State notwithstanding the provisions of Article 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. No profit is charged to the stable establishment because it simply purchased goods for the company.
5. 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.
6. Where profits include income elements 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 air transport
1. The profits from the operation, in international traffic, of aircraft are taxable only in the Contracting State where the effective management seat of the enterprise is located.
2. The provisions of paragraph 1 also apply to benefits derived from participation in a pool, a joint operation or an international operating organization.
Article 9
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 therefore imposes - 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 conditions agreed between the two enterprises had been those that would have been agreed between independent enterprises, the other State shall make an appropriate adjustment to the amount of the tax that would have been made 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 10
Dividends
1. Dividends paid by a corporation that is a resident of a Contracting State to a resident of the other Contracting State shall be taxable in that other State.
2. However, such dividends may also be taxed in the Contracting State of which the corporation paying the dividends is a resident, and according to the law of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
(a) 5% of the gross amount of dividends if the beneficial owner is a corporation (other than a partnership) that holds directly at least 10% of the capital of the corporation that pays the dividends;
(b) 15 per cent of the gross amount of dividends in all other cases;
(c) This subsection does not affect the corporation's taxation of profits that are used to pay dividends.
3. 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.
4. The provisions of paragraphs 1 and 2 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.
5. 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 may 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 or to a fixed base located in that other State, or prelever any
6. Nothing in this Agreement shall prevent a Contracting State from levying, on the profits attributable to a permanent establishment in that State, a corporation that is a resident of the other Contracting State, a tax in addition to the taxes applicable to such income in accordance with the other provisions of the Convention, provided that the additional tax so established does not exceed 5% of the amount of profits attributable to the permanent establishment, determined after the payment of the tax.
7. The provisions of subparagraphs (a) and (b) of paragraph 2 shall 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.
8. The provisions of this Article shall not apply if the principal objective or one of the principal objectives of any person involved in the creation or assignment of shares or other rights under which the dividends are paid is to take advantage of this Article by means of such creation or assignment.
Article 11
Interest
1. Interest arising from a Contracting State and paid to a resident of the other Contracting State shall be taxable in that other State.
2. However, these interests are also taxable in the Contracting State in which they arise and according to the law of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 5% of the gross amount of the interest.
3. Notwithstanding the provisions of paragraph 2, the interests referred to in paragraph 1 shall be taxable only in the Contracting State of which the person receiving the interest is a resident, if that person is the beneficial owner of the interest and if one of the following conditions is met:
(a) This person is one of the Contracting States, one of its territorial authorities, or one of their legal persons of public law, including the central bank of that State; or interest shall be paid by any of these States, communities or legal entities of public law; or
(b) Such interest shall be paid in respect of receivables or loans guaranteed or insured or assisted by a Contracting State or by another person acting on behalf of a Contracting State;
(c) These interests are paid on the basis of the credit sale of industrial, commercial or scientific equipment, or on the basis of the sale of goods or the provision of services by a company to another company;
(d) These interests are paid by a financial institution of a Contracting State to a financial institution of the other Contracting State.
4. 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 income from public funds and bonds of borrowing, as well as the premiums and lots attached to these securities. Penalties for late payment are not considered interest within the meaning of this section.
5. The provisions of paragraphs 1, 2 and 3 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.
6. Interest shall be deemed to arise from a Contracting State where the debtor is a resident of that State. However, where the debtor of interest, whether or not a resident of a Contracting State, has in a Contracting State a permanent establishment for which the debt giving rise to the payment of interest has been contracted and which bears the burden of such interests, these shall be deemed to arise from the State where the permanent establishment is located.
7. 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, taking into account the debt for which they are paid, exceeds 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.
8. The provisions of this Article shall not apply if the principal objective or one of the principal objectives of any person involved in the creation or assignment of the receivable, under which the interest is paid, is to take advantage of this Article by means of such creation or assignment.
Article 12
Claims
1. (a) Royalties from a Contracting State and paid to a resident of the other Contracting State shall be taxable in that other State.
(b) However, these royalties are also taxable in the Contracting State in which they arise and according to the law of that State, but if the beneficial owner of the royalties is a resident of the other State, the tax so charged cannot exceed 5% of the gross amount of the royalties.
(c) Notwithstanding the provisions of subparagraphs (a) and (b), royalties arising from a State and paid to a resident of the other State for the use or concession of the use of a copyright or similar right (excluding fees relating to software, film films and other recordings of sounds or images) shall be taxable only in that other State, if so resident.
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 software, film films and other recordings of sounds or images, a patent, a trademark or trade mark, a drawing or a model, a plan, a process
3. The provisions of paragraph 1 shall not apply where the beneficial owner of the royalties, a resident of a Contracting State, exercises in the other Contracting State in 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. The royalties shall be deemed to arise from a Contracting State when the debtor is a resident of that State. However, where the debtor of royalties, whether or not a resident of a Contracting State, has in a State a permanent establishment for which the obligation to pay royalties has been contracted and which bears the charge of these royalties, these are considered to be from the State where the permanent establishment is located.
5. 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, taking into account the benefit for which they are paid, exceeds the amount agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this section 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.
6. The provisions of this section shall not apply if the principal purpose or purpose of any person involved in the creation or assignment of rights, under which royalties are paid, is to take advantage of this section by means of such creation or assignment.
Article 13
Capital gains
1. (a) The gains derived by a resident of a Contracting State from the alienation of real property referred to in Article 6, and situated in the other Contracting State, shall be taxable in that other State.
(b) Gains derived from the alienation of shares, shares or other rights in a corporation, trust or any other institution or entity, whose assets or assets are constituted for more than 50% of their value or derive more than 50% of their value - directly or indirectly by the interposition of one or more other corporations, trusts, institutions or entities - of real property referred to in Article 6 and taxable in a Contracting State or of rights For the purposes of this provision, real property affected by such a corporation is not considered for its own business activity.
2. 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.
3. The gains from the alienation of aircraft operated in international traffic or movable property assigned to their operation shall be taxable only in the Contracting State where the effective management seat of the enterprise is located.
4. Gains derived from the alienation of shares or shares that are part of a substantial interest in the capital of a corporation that is a resident of one of the Contracting States are taxable in that State.
Substantial participation is considered to exist when the transferor, alone or with related persons, directly or indirectly disposes of shares or shares, the whole of which is entitled to 25% or more of the profits of the corporation.
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.
Article 14
Employment income
1. Subject to the provisions of Articles 15, 17 and 18, 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 the 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 during any period of twelve months beginning or ending in the fiscal year under review, 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. Subject to the provisions of Article 18, and notwithstanding the provisions of paragraphs 1 and 2, the remuneration of a teacher or a researcher who is, or who was immediately before going to a Contracting State a resident of the other Contracting State and who resides in the first State for the sole purpose of teaching or conducting research shall be taxable only in the other State. This provision applies for a period not exceeding 24 months deducted from the date of the first arrival of the teacher or researcher in the first State to teach or to undertake research. However, where the research is not undertaken in a public interest but primarily for the realization of a particular benefit benefit to one or more specified persons, the provisions of paragraphs 1 and 2 are applicable.
4. Notwithstanding the preceding provisions of this Article, remuneration received for an employee employed on board an aircraft operated in international traffic shall be taxable in the Contracting State where the effective management seat of the enterprise is located.
Article 15
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 16
Artists, athletes and models
1. Notwithstanding the provisions of Articles 7 and 14, 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 show, such as a theatre, cinema, radio or television artist, or a musician, or as a sportsman or model, may be taxed in that other State.
2. Notwithstanding the provisions of Articles 7, 12, 14 and 20, where an artist, athlete or resident model of a Contracting State derives income from the other Contracting State in respect of benefits not independent of his professional reputation, such income shall be taxable in that other State.
3. Where the income referred to in paragraph 1 is attributed not to the artist, athlete or model himself but to another person, they are taxable, notwithstanding the provisions of Articles 7, 12, 14 and 20, in the Contracting State from which they arise.
4. Notwithstanding the provisions of paragraph 1, income derived by a resident of a Contracting State from his or her personal activities carried out in the other Contracting State as an entertainer, sportsman or model shall be taxable only in the first State when such activities in the other State are financed mainly by public funds of the first State or its territorial authorities, or their legal persons of public law.
5. Notwithstanding the provisions of paragraph 2, where the income of activities that a resident of a Contracting State, an entertainer, sportsman or model, exercises personally and in that capacity in the other Contracting State shall be attributed not to the artist, athlete or model himself but to another person, whether or not a resident of a Contracting State, such income shall not be taxable, notwithstanding the provisions of Articles 7,
Article 17
Pensions
Subject to the provisions of Article 18, paragraph 2, 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 18
Public functions
1. (a) Salaries, salaries and other similar remuneration, other than pensions, paid by a Contracting State or one of its territorial authorities or by one of their public legal persons to a natural person for services rendered to that State, community or legal person shall be taxable only in that State.
(b) 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. (a) Pensions paid by a Contracting State or one of its territorial authorities or by one of their legal persons of public law, either directly or by drawing from 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.
(b) 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 14, 15, 16 and 17 apply to salaries, salaries and other similar remuneration as well as to pensions paid for services rendered in the course of an industrial or commercial enterprise activity carried out by a Contracting State or one of its territorial authorities or by one of their legal entities of public law.
Article 19
Students and trainees
The sums that a student, apprentice or trainee who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who resides in the first State for the sole purpose of pursuing his or her studies or training shall be paid to cover his or her maintenance, education or training expenses shall not be taxable in that State, provided that they arise from sources outside that State.
Rule 20
Other income
1. The income elements of a resident of a Contracting State, wherever they arise, of which the resident is the beneficial owner and which are not dealt with in the preceding articles of this Convention 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 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 relationships between the person referred to in subsection 1 and another person, or that both persons maintain with third parties, the amount of income referred to in the same subsection exceeds the amount that would be agreed upon 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 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 Article shall not apply if the principal purpose or purpose of any person involved in the creation or assignment of the rights under which the income is paid is to take advantage of this Article by means of such creation or assignment.
Article 21
Elimination of double taxation
1. 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 Andorran Principality in accordance with the provisions of the Convention shall be taken into account in computing French tax when it is not exempted from corporate tax under French domestic law. In this case, Andorran tax is not deductible from these revenues, but the resident of France is entitled, subject to the conditions and limits set out in (i) and (ii), to a tax credit attributable to French tax. This tax credit is equal to:
(i) for income not referred to in ii), the amount of the French tax corresponding to these revenues provided that the resident beneficiary of France is subject to Andorran tax on the basis of these revenues;
(ii) for income subject to tax on the companies referred to in Article 7 and Article 13, paragraph 2, and for income referred to in Article 10, Article 11, Article 12, paragraph 1 of Article 13, Article 14, paragraph 4, Article 15, and Article 16, paragraphs 1 and 2, to the amount of tax paid in Andorra 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) (i) It is understood that the term "the amount of French tax corresponding to these revenues" used in (a) means:
- 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;
- 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 total net income.
(ii) It is understood that the term "tax amount paid in Andorra" used in (a) means the amount of Andorran tax actually borne on a final basis on the basis of the income considered, in accordance with the provisions of the Convention, by the resident of France that is taxed on such income under French law.
2. For Andorra, double taxation is eliminated as follows:
(a) Where a Andorran resident receives income that, in accordance with the provisions of this Convention, is also taxable in France, Andorra grants the tax that it receives from that resident a deduction of an amount equal to the income tax paid in France.
However, this deduction cannot exceed the Andorran tax fraction, calculated before deduction, corresponding to taxable income in France.
(b) Where, pursuant to the provisions of the Convention, a Andorran resident receives income that is tax-free in Andorra, Andorra may nevertheless, for the purposes of calculating the tax owed on the other elements of that resident's income, take into account the exempt income.
Article 22
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, particularly 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. This provision shall not be construed as requiring a Contracting State to grant personal deductions, deductions and tax reductions to the residents of the other Contracting State on the basis of the situation or family expenses that it grants to its own residents.
3. Unless the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, paragraph 5 of Article 12 or paragraph 3 of Article 20 are applicable, interest, royalties and other expenses paid by an enterprise 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 they had been paid to a resident of the other Contracting State.
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 obligation relating thereto, which is other or heavier than those to which the other similar enterprises of the first State are or may be subject.
5. The provisions of this section shall apply, notwithstanding the provisions of section 2, to taxes of any kind or denomination.
6. If a bilateral treaty or agreement to which the Contracting States are parties, other than this Convention, includes a non-discrimination clause or a clause of the most-favoured nation, it is understood that such clauses are not applicable in tax matters unless such a treaty or agreement expressly stipulates it.
Article 23
Friendly procedure
1. Where a resident considers that the measures taken by a Contracting State or by the two Contracting States shall result in or result in taxation not in accordance with the provisions of this Convention, he or she may, irrespective of the remedies provided by the domestic law of those States, submit his or her case to the competent authority of the Contracting State of which he or she is a resident or, if his case falls under paragraph 1 of Article 22, to that of the Contracting State of which he or she is a national. The case shall be submitted within three years after the first notification of the measure that results in taxation not in conformity with the provisions of the Convention.
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 the 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 the 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, including within a joint commission composed of these authorities or their representatives, with a view to reaching an agreement as indicated in the preceding paragraphs.
Article 24
Exchange of information
The agreement on the exchange of information in tax matters signed by the Government of the French Republic and the Government of the Principality of Andorra in Andorra la Vella on 22 September 2009 remains applicable to the exchange of information likely relevant to the application of the tax legislation of the Contracting States. The same stipulations shall apply to the exchange of information likely to be relevant to the application of this Convention.
Rule 25
Miscellaneous
1. Notwithstanding the provisions of any other article of this Convention:
(a) a resident of a Contracting State shall not be entitled to the reductions or exemptions of tax granted by the other Contracting State under the Convention if the principal objective or one of the main objectives of the conduct of its operations by that resident or by a person related to that resident is to benefit from the benefits provided by the Convention.
For the purposes of this paragraph, a person will be considered to be related to another person if the person holds at least 50% of the actual interest or if another person holds at least 50% of the actual interest in each of them directly or indirectly. In any case, a person will be considered to be related to another person if, taking into account all the facts and circumstances of that case, one is under the control of the other person or both are under the control of the same person or several other persons.
(b) the benefit of the benefits of the Convention may be denied on an element of income when:
- the recipient is not the beneficial owner of that income, and
- the transaction allows the beneficial owner to bear a lower tax charge on this element of income than the one he would have had to bear if he had directly perceived this element of income.
The competent authorities shall consult if, under this paragraph and the particular circumstances of the case, it is not appropriate to refuse to grant the benefit of the benefits of the Convention.
(c) the income referred to in articles 12, 14, 17 and 20 whose taxation is attributed exclusively to a Contracting State shall also be taxable in the other Contracting State, within the limits of the fraction that is exempted or not taxable in the first State under the applicable tax legislation.
(d) France may impose natural persons of French nationality residing in Andorra as if this Convention did not exist. Where the French tax legislation allows the application of this provision, the competent authorities of the Contracting States shall jointly regulate the implementation of this provision.
2. Where, in accordance with the provisions of this Convention, an income shall be taxed in a Contracting State, and in accordance with the domestic legislation in force in the other Contracting State, a person shall be taxed only on a portion of that income, and not on its total amount, the tax benefit granted in the first Contracting State shall apply only to the share of the income that is taxable without being exempted in the first Contracting State.
Rule 26
Members of diplomatic and consular missions
1. The provisions of this Convention shall not affect the tax privileges enjoyed by members of diplomatic missions or consular posts, and members of permanent delegations to international organizations under either the general rules of international law or the provisions of special agreements.
2. Notwithstanding the provisions of Article 4, any natural person who is a member of a diplomatic mission, consular post or permanent delegation of a Contracting State, located in the other Contracting State or in a third State, is considered, for the purposes of the Convention, as a resident of the State accrediting, provided that he or she is subject to that State accrediting to the same obligations, in respect of taxes on his or her resident State
3. The Convention does not apply to international organizations, their organs or officials, or to persons who are members of a diplomatic mission, consular post or a 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 any of the Contracting States in respect of taxes on all their income, as the residents of that State.
Rule 27
Application methods
1. The competent authorities of the Contracting States may jointly or separately settle the terms and conditions of application of this Convention.
2. In particular, in order to obtain in a Contracting State the benefits provided for in Articles 10, 11 and 12, residents of the other Contracting State shall, unless the competent authorities otherwise have, submit a residence certificate form indicating in particular the nature and the amount or value of the revenues concerned, including the certification of the tax services of that other State.
Rule 28
Entry into force
1. Each Contracting State shall notify the other, through diplomatic channels, of the fulfilment of the procedures required for the entry into force of this Convention. The latter will enter into force on the first day of the month following the day on which the last notification was received.
2. The provisions of the Convention shall apply:
(a) in respect of income taxes collected by deduction to the source, taxable after the calendar year in which the Convention entered into force;
(b) in respect of income taxes that are not collected by deduction from the source, the related income, as the case may be, in any calendar year or year beginning after the calendar year in which the Convention entered into force;
(c) in respect of other taxes, taxations that will arise after the calendar year in which the Convention entered into force.
Rule 29
Denunciation
1. This Convention shall remain in force without limitation of time. However, each of the Contracting States may denounce it on a notice notified by the diplomatic channel at least six months before the end of any calendar year.
2. In this case, the Convention will no longer apply:
(a) in respect of income taxes collected by deduction to the source, taxable after the calendar year in which the denunciation has been notified;
(b) 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;
(c) in respect of other taxes, taxations that will arise after the calendar year in which the denunciation has been notified.
IN WITNESS WHEREOF the undersigned, duly authorized to do so, have signed this Convention.
DONE in Paris, on 2 April 2013, in duplicate, in French and Catalan languages, each text being equally authentic.
For the Government of the French Republic:
Pierre Moscovici
Minister of Economy and Finance
For the Government of the Principality of Andorra:
Jordi Cinca Mateos
Minister of Finance and Public Service
Bernard Cazeneuve
Minister Delegate to the Minister of Economy and Finance, Budget Officer
PROTOCOLE
At the time of the signing of the Convention between the Government of the French Republic and the Government of the Principality of Andorra with a view to avoiding double taxation on income tax and preventing tax evasion and tax evasion, the Governments have agreed on the following provisions that form an integral part of the Convention.
1. With respect to Article 2, it is understood that this Convention will apply to any income tax that may replace or supplement the tax schemes of natural persons in force on the date of signature of the agreement.
2. With respect to Article 4 (1), in the case of Andorra, the term "resident of a Contracting State" includes any natural person who stays in Andorran territory for more than 183 days in a calendar year as well as any natural person who has the centre of his economic interests or who exercises his or her principal activity in Andorra.
It does not include alleged natural persons who have their tax residence in Andorra, because of the possession of Andorran nationality or a residence permit granted by Andorran authorities.
3. With respect to Article 10, 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 paragraph 7 of Article 10, 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.
4. With respect to articles 10 and 11, an investment fund or corporation, located in a Contracting State where it is not subject to a tax referred to in subparagraphs (a) and (b) of paragraph 3 of Article 2, and that receives dividends or interest from the other Contracting State may apply in general the reductions or exemptions of tax provided by the Convention for the fraction of such income that corresponds to the rights held in the resident capital
5. With respect to Article 24, the two Contracting States agree that they will not make use of the faculty offered to the requested Party, by Article 9 of the Agreement on the Exchange of Information in Tax Matters signed by the Government of the French Republic and the Government of the Principality of Andorra in Andorra la Vella on 22 September 2009, to request the requesting Party the reimbursement of certain costs.
IN WITNESS WHEREOF the undersigned, duly authorized to do so, have signed this Protocol.
DONE in Paris, on 2 April 2013, in duplicate, in French and Catalan languages, each text being equally authentic.
For the Government of the French Republic:
Pierre Moscovici
Minister of Economy and Finance
For the Government of the Principality of Andorra:
Jordi Cinca Mateos
Minister of Finance and Public Service
Bernard Cazeneuve
Minister Delegate to the Minister of Economy and Finance, Budget Officer
PROTOCOLE
At the time of the signing of the Convention between the Government of the French Republic and the Government of the Principality of Andorra with a view to avoiding double taxation on income tax and preventing tax evasion and tax evasion, the Governments have agreed on the following provisions that form an integral part of the Convention.
1. With respect to Article 2, it is understood that this Convention will apply to any income tax that may replace or supplement the tax schemes of natural persons in force on the date of signature of the agreement.
2. With respect to Article 4 (1), in the case of Andorra, the term "resident of a Contracting State" includes any natural person who stays in Andorran territory for more than 183 days in a calendar year as well as any natural person who has the centre of his economic interests or who exercises his or her principal activity in Andorra.
It does not include alleged natural persons who have their tax residence in Andorra, because of the possession of Andorran nationality or a residence permit granted by Andorran authorities.
3. With respect to Article 10, 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 paragraph 7 of Article 10, 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.
4. With respect to articles 10 and 11, an investment fund or corporation, located in a Contracting State where it is not subject to a tax referred to in subparagraphs (a) and (b) of paragraph 3 of Article 2, and that receives dividends or interest from the other Contracting State may apply in general the reductions or exemptions of tax provided by the Convention for the fraction of such income that corresponds to the rights held in the resident capital
5. With respect to Article 24, the two Contracting States agree that they will not make use of the faculty offered to the requested Party, by Article 9 of the Agreement on the Exchange of Information in Tax Matters signed by the Government of the French Republic and the Government of the Principality of Andorra in Andorra la Vella on 22 September 2009, to request the requesting Party the reimbursement of certain costs.
IN WITNESS WHEREOF the undersigned, duly authorized to do so, have signed this Protocol.
DONE in Paris, on 2 April 2013, in duplicate, in French and Catalan languages, each text being equally authentic.
For the Government of the French Republic:
Pierre Moscovici
Minister of Economy and Finance
For the Government of the Principality of Andorra:
Jordi Cinca Mateos
Minister of Finance and Public Service
Bernard Cazeneuve
Minister Delegate to the Minister of Economy and Finance, Budget Officer
Done on July 17, 2015.
François Hollande
By the President of the Republic:
The Prime Minister,
Manuel Valls
Minister for Foreign Affairs and International Development,
Laurent Fabius
