Key Benefits:
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. 2006-1251 of 13 October 2006 authorising the approval of the amendment to the Convention between the Government of the French Republic and the Government of the United States of America for the avoidance of double taxation and the prevention of evasion and avoidance Tax on income and capital taxes;
Given the amended Decree No. 53-192 of 14 March 1953 on the ratification and publication of international commitments entered into by France,
Décrète:
The amendment to the Convention of 31 August 1994 between the Government of the French Republic and the Government of the United States of America for the avoidance of double taxation and the prevention of tax evasion and avoidance in respect of taxes on income and on capital, signed in Washington on 8 December 2004, shall be published in the Official Journal of the Republic French.
The Prime Minister and the Minister for Foreign Affairs shall each be responsible for The execution of this Decree, which will be published in the Official Journal of the French Republic.
AVENANT
TO THE CONVENTION BETWEEN THE FRENCH REPUBLIC AND THE UNITED STATES OF AMERICA TENDING THE TAXATION OF THE CUSTOMS IMPOSITIONS AND PREVENTING THE TAXATION OF TAXES ON SUCCESSES AND DATA SIGNED AT WASHINGTON NOVEMBER 1978, SIGNED AT WASHINGTON, DECEMBER 8, 2004
The Government of the French Republic and the Government of the United States of America,
seeking to amend the Convention between the French Republic and the United States of America Avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on estates and donations signed in Washington on November 24, 1978,
agreed to the following provisions:
Article I
A new paragraph 4 is added to Article 1 (Estates and donations covered) of the Convention as follows:
" 4. (a) Notwithstanding any other provision of the Convention, the provisions of this Convention shall not prevent the United States from imposing, in accordance with its law, the succession of a deceased person or the donation of a donor who, at the time of its Death or donation, was:
(i) a citizen of the United States,
(ii) domiciled (within the meaning of Article 4 [Tax Domicile]) in the United States, or
(iii) a former citizen or former long-term resident whose renunciation of that status Has had as one of its main objects the object of evading tax (as defined under United States law), but only for a period of ten years following such renunciation.
(b) Paragraph (a) of this paragraph 4 cannot Under no circumstances affect the obligations of the United States under Article
(i) of Article 10 (Exemptions and deductions for gifts and bequests to disinterested organizations); Article 11, paragraph 2 (Community property Paragraphs 2 or 8 of Article 12 (Exemptions and credits); Article 13 (Deadline for submission of applications for credit and refund) or Article 14 (Mutual Agreement Procedure);
ii) of paragraph 3 of Article 11 (Community property and marital deduction) in respect of estates of persons other than former citizens or long-term residents referred to in subparagraph (a) of this paragraph 4; or
iii) benefits Granted by the United States pursuant to Article 17 (Diplomatic and Consular Officials) for transmissions by persons who are not citizens or have no immigration status of the United States. ".
Article II
Paragraph 2 of Article 3 (General Definitions) of the Convention is deleted and replaced by the following paragraph:
" (2) For the implementation of the Convention at a time Given by a Contracting State, any term or term not defined therein shall, unless the context requires a different interpretation or if the competent authorities agree on a common interpretation within the framework of the provisions of the Article 14 (Mutual Agreement Procedure), the meaning assigned to it at that time by the law of that State concerning the taxes to which the Convention applies, the meaning attributed to that term or expression by the tax law of that State prevailing on the meaning of that State Attribute the other branches of the law of that State. "
Article III
Article 5 (Real Property) of the Convention is deleted and replaced by the following:
" Article 5
Real Property
1. Real property may be taxed by a Contracting State if such property is situated in that State.
2. The expression " Real estate " Has the meaning assigned to it by the law of the Contracting State in which the property in question is situated, being understood, however, that mortgage claims and other claims secured by immovable property are not Considered to be real property. The term includes in any case the accessories, the dead or alive stock of the agricultural and forestry holdings, the rights to which the provisions of private law relating to land ownership apply, the usufruct of immovable property and The rights to variable or fixed payments for the operation or licensing of mineral deposits, sources and other natural resources; ships and aircraft are not considered to be real property.
3. The expression " Real estate " Also includes shares, shares or other interests in a corporation or corporation whose assets are constituted, directly or by the interposition of one or more other corporations or persons At least 50 % of immovable property situated in one of the Contracting States or of rights in respect of such property. Such shares, shares or other rights shall be regarded as situated in the Contracting State in which the immovable property is situated.
4. The provisions of paragraph 1 shall also apply to immovable property of a business and to immovable property used for the performance of an independent profession. ".
Article IV
The last sentence of paragraph 2 of Article 6 (Assets of a permanent establishment and assets constituting a fixed base for the exercise of a liberal profession) of the Convention Is deleted and replaced by the following:
" If a natural person is a member of a partnership or other similar transparent entity that carries on an industrial or commercial activity through a Fixed place of business, it is deemed to have exercised such activity in the measure of its participation in the corporation or in the entity. "
Article V
Subsection 2 (b) of Article 10 (Exemptions and Deductions for Donations and Bequests to Uninterested Organizations) of the Convention is deleted and replaced by the following:
" (b) Is organized and operated exclusively for religious, charitable, scientific, literary, educational or cultural purposes; and ".
Article VI
1. Paragraph 2 of Article 11 (Community property and marital deduction) of the Convention shall be deleted and replaced by the following:
" 2. Property (other than community property) that is transmitted to the spouse not being a citizen of the United States by a deceased or donor domiciled in France, and which is taxable in the United States under the only Articles 5 (Property Real estate), 6 (Assets of a permanent establishment and property of a fixed base used in the performance of a professional occupation) or 7 (Tangible Personal Property), are included for the purposes of determining U.S. tax on the tax base Only if their value (after making any applicable deduction) exceeds 50 % of the value of all property included in the taxable base in the United States. The provisions of this paragraph shall not apply to a citizen of the United States domiciled in France or a former citizen or long-term resident of the United States referred to in paragraph 4 (a) (iii) of Article 1 (Estates and donations Of the Convention). "
2. Paragraph 3 of Article 11 (Community property and marital deduction) of the Convention becomes paragraph 4.
3. A new paragraph 3 is created in Article 11 (Community Property and Marital Deduction) of the Convention drafted
follows: 3. For the calculation of the estate tax in the United States on the basis of property forming part of the estate of a deceased person who (within the meaning of United States law) is transmitted to the surviving spouse of the deceased and would have been eligible for The application of the marital deduction under US inheritance tax legislation if the surviving spouse was a citizen of the United States and all the applicable options had been correctly applied (" the Qualifying property), the estate of the deceased may be entitled to a marital deduction if:
(a) At the time of death (i) the deceased was domiciled either in France or in the United States or possessed the United States citizenship; (ii) the surviving spouse of the deceased The deceased was domiciled either in the United States or in France; and (iii) if the deceased and the surviving spouse of the deceased were domiciled in the United States at the time of death, one or both of them had French nationality; and
b) The executor Testamentary opts for the benefits provided under this paragraph, and irrevocably waives the benefits of any other marital rights deduction that may be granted under the legislation of the United States in connection with a declaration of federal succession concerning the estate of the deceased, within the time limit under U.S. domestic law relating to the choice of a qualified domestic trust ("a qualified domestic trust")
Marital deduction granted under this paragraph 3 shall be equal to the lesser of the value of the eligible goods and the amount of the applicable exclusion ("the applicable exclusion amount") (as defined in the legislation of the United States of America on the date of death of the deceased) determined without taking into account the donations previously made by the deceased. "
Article VII
Article 12 (Exemptions and credits) of the Convention is deleted and replaced by the following:
" Article 12
Exemptions and credits
1. Unless otherwise provided in this Convention, each Contracting State shall collect its tax and grant exemptions, allowances, credits and other deductions in accordance with its
. Double taxation shall be avoided as follows:
(a) To determine the French tax, where the deceased or the donor was domiciled in France at the time of transmission:
i) France imposes the entire estate assets Part of the estate or all of the property that is the subject of the donation, including those that may be taxed in the United States in accordance with the provisions of this Convention, and provides, on that tax, a deduction of an amount Equal to the tax paid in the United States at the time of the transmission of property that, on the occasion of the same event, is taxable in the United States.
(ii) The deduction referred to in paragraph (i) may, however, exceed the share of the French tax, Calculated before any deduction, corresponding to the property for which the deduction is to be granted. For the purposes of the provisions of this paragraph (ii), " the share of French tax means:
A) Where the tax owing on the basis of the property in question is calculated by applying a proportional rate, the proceeds of the taxable net value of Such property by the rate actually applied to such property; and
B) Where the tax owing on the basis of the property being considered is calculated by applying a graduated scale, the proceeds of the taxable net value of those properties by the rate Resulting from the relationship between, on the one hand, the French tax effectively due to the whole of the taxable assets under French law and, on the other hand, the net amount of that taxable assets.
(iii) For the application of Subparagraph (i), U.S. tax:
A) Includes any U.S. tax referred to in section 2 (Taxes Covered) except for taxes that are authorized by the United States to be applied by this Convention in accordance with paragraph 4 of Section 1 (Estates and donations covered), and
B) Is equal in respect of property that is taxable in the United States under section 5 (Real Property), 6 (Assets of a permanent establishment and property of a base Fixed for the performance of a professional profession) or 7 (Tangible Personal Property), to the fraction of the French tax, as defined in paragraph (ii), in respect of such property, but only to the extent that the deceased, at the time of death, or Donor, at the time of the donation, was a citizen of the United States and if it is established that the tax obligations in the United States relating to the death or donation have been fulfilled.
b) To determine United States tax:
i) Where: Each Contracting State shall collect the tax in respect of property that is taxed by France in accordance with Article 5 (Real Property), 6 (Assets of a permanent establishment and immovable property of a fixed base used for the exercise of Or 7 (Tangible Personal Property), the United States shall grant credit equal to the amount of tax collected by France in respect of such property.
(ii) If the deceased or the donor owned the citizenship of the United States at the time of the Death or donation and is considered under Article 4 (Tax Domicile) as having been domiciled in France at the same time, the United States provides a credit equal to the amount of tax collected by France (after application, the case The deduction for tax referred to in paragraph 2 [a] of this Article). If the deceased was a former citizen or long-term resident of the United States referred to in paragraph 4 (a) (iii) of Article 1 (Estates and donations concerned), the United States shall grant a credit equal to the amount of the tax levied by France on the All property that is included in the gross assets of the estate in the United States only because of this status.
(iii) Notwithstanding the provisions of paragraphs (i) and (ii), the total amount of all credits granted by the United States In accordance with this Article or in accordance with their law or other conventions relating to all property on which credit may be granted under paragraphs (i) and (ii) shall not exceed the fraction of the United States tax which Refers to these assets.
3. For the purposes of calculating the U.S. estate tax, for the estate of a deceased person (other than a U.S. citizen) who was domiciled in France at the time of death, a unified credit is granted, the amount of which is equal to
a) The proceeds of credit granted under US law to the estate of a citizen of the United States by the rate resulting from the ratio of the value of the property forming part of the gross estate assets that are Situated on the territory of the United States and the total value of the assets forming part of the gross estate assets in which they are located, and
(b) The amount of the unified credit granted under US law to the estate of a Non-resident person and non-citizen of the United States.
The amount of the unified credit otherwise granted under this paragraph shall be reduced by the amount of any credit previously granted on account of any prior donation made By the deceased. For the purposes of paragraph (a), the fraction of the deceased's gross estate of the deceased situated in the United States shall not exceed the fraction of that gross estate taxable in that State in accordance with this Convention. The benefit of the credit under paragraph (a) shall be granted only if all the information required to verify and calculate the credit is provided.
4. For the calculation of the French tax payable on the occasion of an estate or a gift made by a person who, at the time of death or donation, was a citizen of the United States or a resident of the United States, the same shall be accorded Deductions and credits if the person had been domiciled in France. For the calculation of the French tax payable on the occasion of an estate or a donation made by a person who, at the time of his death or of the donation, was domiciled in France, benefiting a person who is a citizen of the United States or is He is granted the same deductions and credits as if the beneficiary had been domiciled in France.
5. The credits or abattments in respect of taxes imposed by a Contracting State which may be granted under this Article shall be substituted, but shall not be added, to the credits or abattments granted by the legislation of the other State And shall be calculated in accordance with the provisions and within the limits of the legislation of the other Contracting State, which may be amended as necessary without changing the general principle set out above
6. If, in the context of the application of this Convention, property is taxable only in one of the Contracting States and that tax, as determined, is not paid (for a reason other than a specific exemption, abatement, exclusion, Credit or deduction) in that State, a tax may be levied on that property in the other Contracting State, notwithstanding any other provision otherwise.
7. Where, in accordance with the provisions of the Convention, property is not taxable in a Contracting State, that Contracting State may nevertheless, in calculating the tax on taxable property in that Contracting State in accordance with the provisions of the Convention, Of the Convention, take into account the exempt property that is taxable in accordance with the domestic law of that Contracting
. The provisions of this Convention may not result in an increase in the amount of tax levied by one of the two Contracting States under its domestic legislation. A reduction, as a result of the application of this Convention, of the credit or of the deduction attributable to the tax of a Contracting State on account of the tax paid in the other Contracting State, shall not be regarded as an increase in tax. "
Article VIII
The last sentence of paragraph 2 of Article 15 (Reporting and exchange of information) is deleted and replaced by the following sentence:
" All Information provided is kept secret and can only be disclosed to persons (including courts and administrative bodies) involved in the establishment, recovery (including forced recovery) or legal proceedings Relating to the taxes covered by this Convention. "
Article IX
1. Each Contracting State shall notify the other of the completion of the procedures required by its Constitution and its legislation for the implementation of this Protocol.
2. This Protocol shall enter into force on the date of receipt of the last of these notifications and its provisions shall apply to donations made and to successions of deceased persons as of that date.
3. Notwithstanding the provisions of paragraph 2 of this Article, paragraph 3 of Article 11 (Community Property and Marital Deduction) of the Convention and Article 12, paragraph 3 (Exemptions and credits) of the Convention, as Amended by the present amendment, notwithstanding any limitation provided for by the law of the Contracting States in respect of the establishment of tax or refunds on account of a declaration of succession or of an individual declaration Filed by a person, apply to gifts made or to estates opened on or after November 10, 1988, provided that (i) any application for restitution under this Article IX be made within one year to From the first day of the second month following the date on which the present amendment entered into force or within the period prescribed by the domestic legislation to make such an application, and (ii) the provisions of paragraph 4 of Article 1 (Estates and donations covered) apply to this refund claim. In the case of an estate for which it was granted, before the date of entry into force of this amendment, a marital deduction due to the transmission to a qualified domestic trust (" qualified domestic trust), this Succession may choose, within the time limit for submitting a request for restitution referred to in the preceding sentence, to treat this qualified domestic trust ("qualified domestic trust") As if it had not been established, in order to Benefit from the provisions of paragraph 3 of Article 1l (Community Property and Marital Deduction) or Article 12 (3) (Exemptions and credits) of the Convention. If such an option is exercised, the estate shall be deemed to have been transmitted to the surviving spouse on the date of death for the purposes of this Convention.
In witness whereof the representatives of the Governments, duly authorized to this Signed this Attachment.
Done in duplicate at Washington on December 8, 2004, in the English and French languages, both texts being equally authentic.
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
