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Decree No. 2007-78 On January 22, 2007 With Publication Of The Amendment To The Convention Of November 24, 1978, Between The French Republic And The United States Of America Designed To Avoid Double Taxation And Prevent Evasion Tax E...

Original Language Title: Décret n° 2007-78 du 22 janvier 2007 portant publication de l'avenant à la convention du 24 novembre 1978 entre la République française et les Etats-Unis d'Amérique tendant à éviter les doubles impositions et à prévenir l'évasion fiscale e...

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Keywords

FOREIGN AFFAIRS , INTERNATIONAL AGREEMENT , BILATERAL AGREEMENT , FRANCE , UNITED STATES OF AMERICA , CONVENTION , ENDORSING , DOUBLE TAXATION , TAX EVASION , IMPOON ON ESTATES , TAX ON DONATIONS


JORF No. 20 of 24 January 2007 Page 1341
Text #11


DECRET
Decree No. 2007-78 of 22 January 2007 concerning the publication of the amendment to the Convention of 24 November 1978 between the French Republic and the United States of America for the avoidance of double taxation and Prevent tax evasion with respect to taxes on estates and donations, signed in Washington on December 8, 2004 (1)

NOR: MAEJ0730004D ELI: http://www.legifrance.gouv.fr/eli/decret/2007/1/22/MAEJ0730004D/jo/texte
Alias: http://www.legifrance.gouv.fr/eli/decret/2007/1/22/2007-78/jo/texte


The President of the Republic,
On the report of the Prime Minister and the Minister for Foreign Affairs,
Having regard to Articles 52 to 55 of the Constitution;
Given the Law No. 2006-1252 of 13 October 2006 authorising the approval of the amendment to the Convention between the French Republic and the United States of America for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on estates And donations;
Given the amended Decree No. 53-192 of 14 March 1953 on the ratification and publication of international commitments entered into by France,
Décrète:

Article 1


The amendment to the Convention of 24 November 1978 between the French Republic and the United States of America Avoid double taxation and prevent tax evasion with respect to taxes on estates and donations, signed in Washington on 8 December 2004, will be published in the Official Journal of the French Republic.

Article 2


The Prime Minister and the Minister for Foreign Affairs are each responsible for the execution of the present Decree, which will be published in the Official Journal of the French Republic.

Item Annex


BEFORE THE CONVENTION


BETWEEN THE GOVERNMENT OF THE FRENCH REPUBLIC AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA TO AVOID IMPOSITIONS AND PREVENTING THE TAXATION AND TAXATION OF TAXES ON INCOME AND FORTUNE, SIGNED AT PARIS 31 AUGUST 1994, SIGNED AT WASHINGTON DECEMBER 8, 2004
The Government of the French Republic and the Government of the United States of America,
desiring to amend the Convention between the Government of the French Republic and The Government of the United States of America with a view to the avoidance of double taxation and the prevention of tax evasion and evasion with respect to taxes on income and on capital signed in Paris on 31 August 1994,
agreed to the provisions Following:


Item I


1. Paragraph 2 (b) (iii) of Article 4 (Resident) of the Convention shall be deleted and replaced by the following
: (iii) in the case of France, the variable capital investment corporations; in the case of the United States, the Companies, trusts or funds referred to as "regulated investment company," real estate investment trust and " real estate mortgage investment conduit; and similar investment entities agreed by the competent authorities of the States Contractors; "
2. Article 4 (2) (iv) of Article 4 (Resident) of the Convention shall be deleted and replaced by the following and added new paragraphs (b) (v) and (vi) of paragraph 2 of Article 4 as
: (iv) " partnerships And other similar transparent entities, the "Estates and" trusts not covered by paragraphs (ii) and (iii) above, whether or not they are constituted or directed in one of the Contracting States, but only to the extent that the income of these "Partnerships, similar entities," trusts shall be considered for taxation purposes in that Contracting State as income of a resident, either at the level of those "partnerships, entities," trusts or " trusts, or at the level of their partners, Beneficiaries or constituents, being specified that the partnerships, mutual funds, economic interest groups or European groupings of economic interest established in France which have their headquarters In France and not subject to corporate income tax, are treated as "partnerships for the purposes of United States tax for the granting of the benefits of this Convention, to the extent that" partnerships and other entities And trusts, which are not constituted or directed in one of the Contracting States, may benefit from the advantages of this Convention by reason of their income or earnings having their source in France if The following additional conditions are met:
(aa) the absence of contrary provisions in a convention with a view to avoiding double taxation between a Contracting State and the third State;
(bb) the fact that the partnership Or the similar transparent entity, the "estate or" trust concerned is not treated as a tax entity or otherwise subject to tax in any other way on account of French-source income, whether at its level or at the level of Its partners, beneficiaries or constituents, with regard to the tax law of the third State;
(cc) the share of income or gains accruing to a partner, beneficiary or constituent in the " partnership or similar transparent entity, The "estate or" trust concerned is taxed in the same manner, including in respect of the nature, source and period of taxation of such income or earnings, that if the income or earnings were collected directly, without prejudice, however, Differences resulting from accounting methods or exercises or any other similar differences; and
(dd) the possibility of exchanging information on the "partnership or similar transparent entity," "estate or" trust concerned, or Their partners, beneficiaries or constituents, in accordance with the provisions of a convention with a view to avoiding double taxation between the Contracting State in which the income or gains are derived and the third State concerned;
(v) "Partnerships or other similar transparent entities, the" corporations and " trusts not referred to in paragraphs (ii) and (iii) above, which are constituted in the United States, shall be considered to be a resident of the United States under the conditions laid down by Subparagraph (iv) above, and as a resident of France but only to the extent that the income of those "partnerships, similar transparent entities," or " trust have their source in France and correspond to the share of profits or losses Those entities which are the equivalent of a resident of France;
(vi) it is understood that, in relation to paragraphs (iv) and (v) above, the income of "partnerships or other similar transparent entities," or " trusts not covered by the Paragraphs (ii) and (iii) above, are considered for tax purposes by a Contracting State such as income of a resident for the share of income accruing to a partner, a beneficiary or a constituent who is a pension fund, another A non-profit organization or organization referred to in paragraph (ii) above, notwithstanding the fact that all or part of such income from such " trust, other non-profit organization or organization is exempt from income tax in that State. "


Article II


The last sentence of the last paragraph of paragraph 2 of Article 10 (Dividends) of the Convention is deleted and replaced by the following sentence:
" When it is a Dividends paid by a "United States trust" real estate investment trust, the provisions of b apply only if:
(i) the beneficial owner of the dividends is a natural person who owns not more than 10 per cent of the rights In this "real estate investment trust";
(ii) dividends are paid on account of a class of shares that is publicly traded and the beneficial owner of the dividends is a person who holds no more than five per cent of any Which class of shares in this "real estate investment trust"; or
(iii) the beneficial owner of the dividends is a person who holds not more than ten per cent of the rights in that "real estate investment trust" and no other person Has an interest in the real estate investment trust exceeding more than ten per cent of the total real estate rights of the real estate investment trust. ".


Article III


Article 18 (Pensions) of the Convention is deleted and replaced by the following:


" Article 18
Pensions


1. Amounts paid pursuant to social security legislation or similar legislation of a Contracting State, as well as amounts paid under a pension plan and other similar remuneration derived from the Contracting States in respect of a previous employment with a resident of the other Contracting State, in the form of periodic payments or a lump sum, shall be taxable only in the first State. For the purposes of applying the provisions of this paragraph, amounts paid under a pension scheme and other similar remuneration shall be deemed to arise in a Contracting State only when they are paid by a system of Retirement plan or any other pension plan incorporated in this state.
2. (a) Where a natural person performs an independent or dependent profession and is a resident of a Contracting State without possessing the nationality of that State, and that person makes contributions to a pension plan that is constituted, Established and recognised for tax in the other Contracting State:
(i) contributions paid by or on behalf of that natural person to such plans are deductible from taxable income in the first State in the same way as Contributions to a pension plan constituted, established and recognised for tax purposes in that State, subject to the financial limits provided for in the legislation of that State; and
(ii) in respect of the dependent professions, Any product accumulated within that pension plan or any payments made to that plan by or on behalf of the employer of the natural person is excluded from the taxable income of that person in the first-mentioned State and is deductible in the Determination of the benefit of the employer in that State in the same way as the contributions paid to a pension plan which is established, established and recognised tax in that State, subject to the financial limits provided for in the legislation of This State;
(b) The provisions of this paragraph apply only if:
(i) contributions paid by or on behalf of that natural person relate to a pension plan (or other plan to which it would have had Substituted) to which it was affiliated before its arrival in the first state; and
(ii) the competent authority of the first state agrees that the pension plan generally corresponds to an established, constituted and recognized pension plan Tax in this first State;
(c) For the purposes of this paragraph:
(i) in the case of France, it is understood that social security legislation or any other similar legislation in the United States, the plans Qualified as referred to in Section 401 (a) of the Internal Revenue Code, individual retirement plans (including individual retirement plans that form part of a simplified retirement plan for employees who Section 408 (k) conditions, individual retirement accounts ("retirement individual accounts"), individual retirement annuities and accounts referred to in section 408 [p]), the qualified plans referred to in section 403 (a) and Referred to in Section 403 (b), are generally considered to be a pension plan established and recognized for taxation purposes in France; and
(ii) in the case of the United States, it is understood that a system of French retirement or any other pension scheme organised under French social security legislation is generally regarded as corresponding to a pension scheme established and recognised for taxation purposes In the United States; and
(iii) a pension scheme is recognised as tax in a Contracting State if the contributions to that scheme are eligible for tax relief in that State. "


Article IV


1. Paragraphs 2 and 3 of Article 19 (Public Remuneration) of the Convention shall be
. A new paragraph 2 of Article 19 (Public Remuneration) of the Convention shall be added as
: 2. The provisions of Articles 14 (Independent Personal Services), 15 (Dependent Personal Services), 16 (Discharge Tokens) and 17 (Artists and Athletes) shall apply to remuneration and pensions paid in respect of services rendered in connection with an activity Industrial or commercial carried on by a Contracting State, one of its political subdivisions (in the case of the United States) or one of its local authorities, or by one of their legal persons governed by public law. "


Article V


1. Article 24 (2) (b) (iv) of Article 24 (Elimination of double taxation) of the Convention shall be
. Paragraphs (b) (v) and (b) (vi) of paragraph 1 [paragraph 2 in English] of Article 24 (Elimination of Double Taxation) of the Convention shall be renumbered respectively (b) (iv) and (b) (v).
3. Article 24 (1) (c) of Article 24 (Elimination of double taxation) of the Convention shall be deleted and replaced
the following: (c) In the case of a natural person who is a resident and Citizen of the United States and who has French nationality, the provisions of paragraph 2 of Article 29 (Miscellaneous provisions) shall apply to the remuneration referred to in Article 19 (1) (Public Remuneration), but these Salaries are considered by the United States as French-source income. "


Article VI


1. The last sentence of paragraph 2 of Article 29 (Miscellaneous provisions) of the Convention is deleted and replaced by the following:
" For this purpose, the term " citizen includes a former citizen or former long-term resident whose Renunciation of this status has had as one of its main objects the object of evading tax (as defined under the law of the United States), but only for a period of ten years following such renunciation. "
2. Paragraph 3 of Article 29 (Miscellaneous provisions) of the Convention shall be deleted and replaced by the following:
3. The provisions of paragraph 2 shall not affect:
(a) the benefits granted under the provisions of paragraph 2 of Article 9 (Associated undertakings), paragraph 3 (a) of Article 13 (Capital Gains), paragraph 1 of the Article 18 (Pensions), and Articles 24 (Elimination of Double Taxation), 25 (Non-Discrimination) and 26 (Mutual Agreement Procedure); or
(b) the benefits granted pursuant to the provisions of Article 18 (2) (Pensions) and Article 19 (Public Remuneration), 20 (Teachers and Researchers), 21 (Students and Trainees) and 31 (Diplomatic and Consular Officials), to natural persons who are not citizens of the United States and have no status in the United States Of immigrant. "


Article VII


1. Each Contracting State shall notify the other of the completion of the procedures required by its Constitution and its legislation for the coming into force of this Protocol. This will take effect on the date of receipt of the last of these notifications.
2. With the exception of the provisions of paragraph 3, the provisions of this Protocol shall apply:
(a) in respect of taxes collected by deduction at source, to amounts paid or credited as from the first day of the second month After the date on which the rider entered into force; and
(b) in respect of other taxes, to taxation periods beginning on or after the first day of January following the date on which the rider entered into force.
3. The provisions of paragraph 2 of Article I of this Protocol, with the exception of those provisions which define a " Mutual fund " As a " Partnership " For the granting of benefits under this Convention by the United States, Apply:
(a) in respect of taxes collected by withholding tax at source, to any amount paid or credited as of February 1, 1996: and
(b) in respect of other taxes, to taxation periods beginning at Effective January 1, 1996.
In witness whereof the undersigned, being duly authorized to that effect, have signed this Attachment.
Done in duplicate at Washington, on December 8, 2004, in the English and French languages, the two texts being Also faith.


For the Government of
of the French Republic:
Jean-David Levitte,
Ambassador of France
to the United States
For the Government of the
States of America:
Samuel W. Bodman,
Assistant Treasury Secretary


Done at Paris, January 22, 2007.


Jacques Chirac


By the President of the Republic:


The Prime Minister,

Dominique de Villepin

The Minister for Foreign Affairs,

Philippe Douste-Blazy


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