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Legal news

Property deficit

Posted on : June 4, 2024

Which charges are liable to a deduction for the Land Income Tax (hereinafter LIT)? When is the deficit considered for the income tax? Are those charges considered after the threshold value of 10.700 EUR?

The following reasoning is based on the article 31 of the Code Général des Impots (Tax Code).

Charges liable for a deduction.

The fees and charges considered for the deduction:

  • Reparation and maintaining or improvement.
  • The fees required from the renter but paid by the owner.
  • Provisions for the co-ownership fees.
  • Management fees and loan interest.
  • This list is not exhaustive.

Deduction of the deficit and the relationship with the income tax.

If the difference between the benefits and the charges shows a deficit then it is deductible from the income tax if the landowner rent it for at least 3 years (ending December, the 31st).

However, a threshold set at 10.700 EUR is the maximum allowed for a deduction, but this threshold is increased to 21.400 EUR when the works done is related to energic efficiency.

Over this sum, the deficit can be deductible the next financial years and for 10 years after that. If the income tax is not high enough to overtake the deficit, then the deficit can be deductible for 6 years.

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What is the tax treatment of your crypto assets in companies?

Posted on : April 29, 2024

Investment in crypto-assets has grown significantly over the past few years, with many companies now holding them on their balance sheets and a large number of innovative companies being established in this sector. Here we look at the tax treatment of these digital assets when owned by businesses. The 2019 Finance Law has created for the first time a tax regime for individuals (and partnerships referred to in Article 8 et seq. of the General Tax Code) specific to occasional disposals of digital assets, partly inspired by the regime applicable to gains on securities. It sets an overall tax rate of 30%, equivalent to the flat tax, i.e. a rate of 12.8%, plus social security deductions of 17.2%. The specificity of this particular regime is that it introduces, in particular, a tax deferral in the case of an exchange of digital assets without an equalisation payment, in order to take into account the large number of transactions associated with the sector.

For legal persons, there is no specific regime for gains or losses from holding digital assets. However, the Parliament raised the issue during the discussions on the 2022 budget, where several amendments were tabled. Proposals aimed at harmonising the tax treatment of companies with that of individuals were rejected, as these amendments could have led to a de facto exemption for companies that choose not to convert their digital assets into euros. All these amendments were rejected by the government and withdrawn. The result is that, unlike individuals, there is currently no specific tax regime for companies subject to corporate tax.

Therefore, in the absence of rules deviating from the accounting principles, subscription to and possession of digital assets are recognised and taxed in accordance with the accounting rules applicable to each category of that asset. In the absence of a tax deferral, any exchange of one digital asset for another digital asset results in the recognition of a taxable capital gain or loss. As a result, the development of digital assets is hampered by a tax system that results in the recognition of a gain or loss on each exchange transaction.

Taxation of digital asset issuance

An Initial Coin Offering (hereinafter “ICO”) is a public offering to raise funds for the financing and development of an issuer’s project. It gives rise to the issuance of digital tokens, which are given to the investor in exchange for a sum of money or crypto money. ICOs are carried out using blockchain technology, so there is no middleman between the subscribers and the token issuer. An ICO offers significant advantages, especially for the issuer of the project. ICOs can be completed quickly and the lack of barriers on the internet means that a wide audience of investors can be reached. Furthermore, it allows project leaders to raise funds without opening up their capital, which in turn allows them to raise funds without dilution.

The bill on the growth and transformation of businesses, known as the “Pact”, has created a framework for these fundraising operations in light of their growing importance (6.8 billion raised in 2017, 21 billion in 2018) and has made France a pioneer in this area. With regard to the issuance and exchange of tokens, the supply of goods and services for consideration by a taxable person acting as such is subject to VAT.

A transaction is subject to VAT if there is a direct link between the service provided or good acquired and the consideration received, i.e. if a transaction provides the customer with an individualised benefit on the one hand, and if the price received in return is related to the benefit obtained on the other. Individual subscribers are taxed either at the flat rate of 30% with deferred taxation if they act as individuals, or in the industrial and commercial profit category if they act as professionals.

Taxation of digital assets

Value added tax (VAT)

A company that has acquired digital assets whose issuance has been subject to VAT is entitled to deduct the VAT in accordance with the general legal rules, provided it is in possession of a document showing the deductible VAT (invoice, etc.).
If they have been treated as multi-purpose vouchers, the right to deduct VAT can of course only be exercised when the VAT is payable by the issuer.
If they fall under the rules for single-use vouchers, VAT should be immediately deductible under the general legal provisions. Without prejudice to the ordinary law rules on territoriality, resale should be taxable.

Corporate income tax

Taxation of holdings of financial instruments (“secf/r/tytokens”)

For accounting purposes, the French general chart of accounts distinguishes between three different types of token:

– tokens with characteristics of financial securities, savings bonds or financial contracts, or “securities tokens;
– Tokens recognised as intangible assets'”‘ ;
– Tokens recognised as current assets: these are tokens that do not have the characteristics of financial securities, financial contracts or cash coupons, with no intention to use the related services or deliver the related goods.

The concept of digital assets was defined in Article L. 54-10-1 of the French Monetary and Financial Code when the PACTE law was adopted in 2019. According to this article, digital assets comparable to the instruments mentioned in Article L. 21J-1 of the Monetary and Financial Code and the savings bonds mentioned in Article L. 223-1 of the same code fulfil the characteristics of financial instruments. In practice, these are mainly shares, debt securities, units or shares in collective investment undertakings, financial futures instruments and savings bonds.

For accounting purposes, the company’s digital assets must be recognised in accordance with the accounting rules applicable to the type of financial instrument to which they are linked. For tax purposes, as mentioned above, there are no special rules, so the accounting and tax treatment is identical. However, if digital assets give rise to the payment of ‘rewards’ that are similar to interest, the latter must be recognised in the income statement for the financial year in which they accrue. For accounting purposes, the company’s digital assets must be recognised in accordance with the accounting rules applicable to the type of financial instrument to which they are linked.

Taxation when holding non-financial digital assets (“utility tokens”)

The accounting and taxation of these digital assets will depend on the intention of the entity acquiring them. If the company intends to use the services or goods associated with the acquired digital assets beyond the subscription period, they must be recognised as “intangible fixed assets” in accordance with Article 619-1l of the General Tax Code.

Otherwise, they will be recognised in current assets as cash instruments. Digital assets recognised as intangible assets – Normal accounting rules will apply, so digital assets must be amortised in accordance with the applicable rules, i.e. over their actual and foreseeable useful life. It should be noted that if the expected use of the related services or goods no longer exists, the digital assets recognised as intangible assets can be transferred to cash instruments.

The transfer must be made at the net book value. However, any reverse transfer of digital assets recorded in a cash account to an intangible asset account is prohibited. In accordance with the traditional rules, an impairment test must be performed in case of impairment, i.e. when the market value of the digital assets turns out to be less than their net book value. When a company wants to remove its digital assets from the balance sheet, it can do so by voluntary redemption, which would involve cancelling the net book value of the token on the transaction date, but it is more common to sell these digital assets to a third party on the secondary market. Again, the accounting and tax rules are identical. The difference between the sale price and the net book value will constitute a capital loss or capital gain that is taxable under ordinary law. Digital assets are recognised as cash instruments – In all other cases, digital assets will be classified in account SZZ “Tokens held” and the unrealised gain or loss will be recognised as an asset or liability.

In case of sale or withdrawal, capital gains or losses are calculated using the FIFO (first-in, first-out) or WAC (weighted average cost of acquisition) method. Here too, the general legal rules apply, both from an accounting and a tax point of view. The current digital asset holding regime poses unsustainable constraints for businesses and accountants, especially as they perform a large number of exchanges between digital assets. The number of transactions involved and the volatility of the tokens make this a complex exercise.

During the discussions on the 2022 Finance Act, an amendment was proposed to defer the time of taxation of profit or loss to the time of the transaction that enriches the business, i.e. the sale in exchange for currency or other goods or services. The purpose of this amendment was to bring the regime applicable to companies in line with that adopted for individuals in the Finance Act 2019.

However, to allow the state to benefit from budget revenues in a post-covid context, a three-year tax deferral period was introduced, at the end of which untaxed profits would be reintegrated into taxable income. However, this amendment was not adopted. As a result, any exchange of a digital asset for another digital asset would currently result in a taxable capital gain or capital loss in the absence of a tax deferral.

The French tax system is still under construction. As the current rules impose certain constraints on companies carrying out a large number of exchanges between digital assets, particularly with regard to the calculation of the taxable capital gain, it is now more than desirable for the legislator to intervene to remedy this situation so that a framework adapted to the specific nature of this new category of assets can be adopted.


Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NICE
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437












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The Airbnb Bill

Posted on : February 21, 2024

On January 29, 2024, the National assembly (“Assemblée Nationale”) passed the proposed “Airbnb” law on first reading with amendments.
This “Airbnb” law aims to put furnished tourist accommodation back on the long-term rental market, by modifying the taxation of tourist rentals with a drastic reduced tax allowance, down from 71% or 50% depending on the situation to just 30%.
New obligations have also been imposed on owners wishing to change the use of their property to furnished tourist accommodation, requiring them to provide a sufficiently good energy performance diagnosis, to prevent over-energy-consuming properties from ending up on vacation rental sites. Mayors will also have the power to reduce the maximum rental period for principal residences to 90 days a year, compared with 120 days today .

Modification of the taxation of tourist rentals

The proposed law modifies the highly advantageous “micro BIC” tax regime for tourist rentals:

  • The tax allowance for classified furnished tourist accommodation (quality label, ranging from 1 to 5 stars) is lowered to 30%, subject to an annual rental income ceiling of 30,000 euros (compared with 71% and a ceiling of 188,700 euros
    today) ;
  • In rural areas and winter sports resorts, an additional allowance of 41% is available, provided that sales do not exceed 50,000 euros ;
  • The tax allowance for unclassified furnished tourist accommodation will also rise to 30%, with an annual rental income ceiling of 15,000 euros (compared with 50% and a ceiling of 77,700 euros today).

In addition, the double deduction of depreciation for non-professional furnished tourist accommodation (LMNP) (“Location meublée non-professionel”) as part of the actual tax regime has been abolished.

New obligations for furnished tourist accommodation

The text requires owners who want to change the use of their property to a furnished tourist accommodation:

  • For a definitive change, the presentation of an energy performance diagnosis (“Diagnostic de performance énergétique”) (DPE) classified between levels A and D ;
  • For a temporary change, the mandatory energy renovation schedule for housing set by the 2021 Climate and Resilience law (“Loi Climat et resilience de 2021”). As in the case of conventional housing, G-rated furnished tourist accommodation will be banned from rental on January 1, 2025, F-rated on January 1, 2028 and E-rated on January 1, 2034.

Principal residences and overseas territories are not affected

These new rules will prevent long-term rentals from switching to short-term rentals to get around the ban of the renting of over-energy-consuming properties. It is planned that the stock of premises that have already obtained final authorization will be brought into compliance within five years.
A new obligation will also apply to condominiums: owners and tenants will have to inform the syndic of any change of use, who will have to put it on the agenda for the next general meeting.

Extended powers for mayors

The proposed law gives mayors broader powers to better regulate premises used for tourism :

  • The town hall registration procedure is extended to all prior declarations for the rental of furnished tourist accommodation (“Déclaration préalable de mise en location d’un meublé de tourisme”), regardless of the municipality, and whether or not it is a principal residence. Although furnished tourist accommodation already have to be declared to the town hall, they are not always registered, which means that supporting documents can be requested. The widespread use of a registration number, after declaration to a national teleservice, is considered essential to improve mayors’ knowledge of the rental tourist (“parc locatif touristique”), and a necessary condition for better regulation. The system will be applicable by early 2026 at the latest ;
  • Mayors will be able to impose two new administrative fines of up to 5,000 euros for failure to register a furnished tourist accommodation, and up to 15,000 euros for use of a false registration number ;
    All municipality will be able to lower the maximum number of days a principal residence can be rented out for tourism purposes, from 120 days to 90 days per
    year ;
  • Municipality with change-of-use regulations will be able to extend the change-of-use regime to all premises not used for residential purposes. The aim is to regulate the practices of investors who are increasingly turning to the conversion of offices into furnished tourist accommodation, since the introduction in 2021 of an authorization for the conversion of commercial premises into tourist accommodation.

The text also extends to all communes the option of applying change-of-use regulations, without authorization from the prefect. It also opens up the possibility for municipality to define quotas for change-of-use authorizations, and to delimit, in their local urban plan (PLU) (“Plan Local d’Urbanisme”), sectors where, for any new construction, only principal residences will be authorized.

This option will be open to some 9,300 municipality : those with more than 20% secondary residence, and those where the annual tax on vacant propriety (“Taxe annuelle sur les logements vacants”) is applicable and where an increase in residence tax on second homes (Taxe d’habitation sur les residences secondaires”) is permitted. The Senate must now examine the proposed law.

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The taxation of expatriated employees

Posted on : February 14, 2024

Note on the special tax regime for expatriate employees and the conditions under which they are eligible for this special regime with other taxpayers who select domicile in France.

Taxation of expatriate employees – Impatriates employee

Article 155 B of the French General Tax Code (GTC) provides the possibility for expatriate employees in France to benefit from a special tax regime. The GTC provides number of conditions for the application of the “impatriation” scheme.

Scope of the General Tax Code – The conditions

  • The status of the taxpayers

In application of article 80 ter of the GTC, there are a statute requirement to benefit of the impatriate regime :

– For public limited company Chief Executive Officer, the directors or members of the Supervisory Board, the members of the Management Board and the provisional managing director.
– For minority managers of limited liability companies.
– For all other companies or establishments subject to corporation tax, managers subject to the employee tax regime.

  • Executive expatriation

The GTC requires, for those taxpayers to be called from abroad to take up employment with a company established in France for a limited period (in a maximum of 8 years). The expatriation may not exceed 8 years, in which the expatriate is considered as a resident in France for tax purposes. To be eligible, the expatriate must not have been domiciled in France for tax purposes in the 5 years prior to expatriation.

Consequences of impatriate employee status

  •  Impatriate workers taxation

Impatriate workers benefit from a special tax regime to the extent that they are subject to tax on the remuneration received directly in connection with their new position carried out in France.
Nevertheless, expatriates can still opt out for a taxation equal to 30 % of their remuneration received in France. Expatriates are granted by a continuity of this scheme, even though they are replaced for a new function in the same company, but also if they are replaced in a new company detained by the same group, if the new company is located on French territory.

Expatriates can also benefit, in case of a work trip in a foreign country, which implied a remuneration, only if this trip was directly and exclusively bound to the French employer interest. Expatriates will also be able to benefit from a 50 % reduction in the amount of income from transferable securities, income from patents or copyright, and gains from the sale of securities or company rights, paid from outside France or by a person residing in a territory bounded with France by a tax treaty including an administrative assistance clause to fight tax fraud.

According to the highest administrative court decision, the Conseil d’Etat, of the 21st of October 2020 (no. 444799), the exoneration of transferable capital provided by article 155 B of GTC point II, is not linked to an actual remuneration for the activity in France.

There is no taxation for any expatriation bonuses. On the 27th Septembre 2023, the French National Assembly rendered a Report establishing that the situation of impatriate employees’ property wealth taxation in France was limited to assets located in France.

  • Advantages of the expatriate scheme in France

The expatriate employee in France, if he is seconded for a significant period abroad, will not be able to hope for an exemption from the remuneration he will have received abroad, under the yoke of article 81 A of the GCT, it will only be subject to the exemption provided for by article 155 B of the GCT.

A decision of the Conseil d’Etat, dated on March 26, 2003 (no. 226400), establishes the maximum duration of the expatriation at 24 months, beyond this period, the exemption of income obtained abroad provided for by article 155 B of the GCT is no longer guaranteed for the taxpayer.

The expatriated taxpayer is granted by an extended limited period than taxpayers submitted to article 81 A of the GCT. Which are subject to assessment by the administrative courts, which determine a reasonable duration on a case-by-case basis (EX: Conseil d’Etat decision of March 14, 2011, no. 318129).

Taxation of taxpayers electing domicile in France

The main principle in Taxation law is territoriality. In France, this principle is provided by article 4 of the GTC:

“Persons whose tax domicile is in France are liable to income tax on all their income. Those whose tax domicile is outside France are liable for this tax solely on the basis of their French-source income.”

Conditions for tax liability in France

Prior to be subject to taxation in France, foreign taxpayers must have close or at least significant ties with France.

According to article 4 B of the GTC, if foreign taxpayers want to be subject of French tax law, they must have their main home or place of residence in France, be employed or self- employed in France, or have their center of economic interests in France.

A Conseil d’Etat’s ruling of the 15th of June 2007 (no. 284449) stated that foreign cannot opt for French taxation if there are no ties with France.

Consequences for taxpayers

If we refer to article 4 B paragraph 1 of the GTC, it can be determined that taxpayers who opted for tax domicile in France is taxable on his universal income, even foreign income is subject to an allowance from French tax.

In this case, taxpayers will be taxed in accordance with the agreements entered by France and the country of the source of the income.
Taxpayers will be subject to the international agreements concluded with France and the countries of the source of the income.

In the absence of agreements, taxpayers will be subject to double taxation in the country of source, which will lead to a tax credit against French tax authorities, depending on the amount of this tax, if taxpayers are subject to a higher tax than what is provided in French law.
Otherwise, taxpayers will have to pay the difference between the tax at source and the French tax in France.

Med venlig hilsen / Kind regards
Cabinet Nicolas BRAHIN
Advokatfirma i NICE, Lawyers in NICE
Camilla Nissen MICHELIS
Assistante – Traductrice
1, Rue Louis Gassin – 06300 NICE (FRANCE)
Tel : +33 493 830 876 / Fax : +33 493 181 437


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International tax treaty between FRANCE and the UNITED KINGDOM: The tax credit context.

Posted on : January 19, 2024

A convention between FRANCE and the UNITED KINGDOM for the avoidance of double taxation and the prevention of fiscal evasion and avoidance with respect to taxes on income and capital gains, together with a protocol, was signed in London on June 19, 2008.

The agreement of June 19, 2008, replaced the agreement of May 22, 1968, as amended by four successive addenda.

In terms of general provisions, the agreement has similar features to other international agreements with FRANCE.

  • Persons covered :

The agreement applies to residents of FRANCE, THE UNITED KINGDOM or both.

  • Taxes covered :

Paragraph 1 of Article 2 of the agreement lists the taxes covered by the agreement:

“The taxes to which this Convention shall apply are: (a) in the case of the United Kingdom: (i) income tax; (ii) corporation tax; (iii) capital gains tax; (hereinafter referred to as “United Kingdom tax”) ; b) in the case of France, all taxes levied on behalf of the State or its local authorities, irrespective of the system of collection, on total income or on items of income, including taxes on gains from the alienation of movable or immovable property, taxes on the total amount of salaries paid by companies, and taxes on capital gains, and in particular : (i) income tax; (ii) corporate income tax; (iii) social security contributions on corporate income tax; (iv) payroll tax; (v) general social security contributions; (vi) social security debt repayment contributions”.

For FRANCE, these include income tax, corporate income tax, the social contribution on corporate income tax, payroll tax, general social contributions and contributions for the repayment of the social debt.

  • Real estate wealth tax :

Since January 1, 2018, the ISF has been replaced by the real estate wealth tax (“l’impôt sur la fortune immobilière”), whose base is restricted to real estate and real estate rights held by the taxpayer, directly or through a company or organization.
In its administrative comments on this new tax, the French tax authorities stated in a remark that “the principles guiding the interpretation of the provisions of tax treaties used for the wealth tax are used for the wealth tax. However, a treaty applicable to the solidarity tax on wealth is not necessarily applicable to the wealth tax, as a case-by-case examination of the treaty provisions is necessary”.

  • Tax credit for French tax residents :

The tax credit for French tax residents is equal to the amount of French tax corresponding to income taxable in the UNITED KINGDOM. The income qualifying for the tax credit is income included in the UK tax base, without the person concerned being exempt on the grounds of his or her status or activity but does not require such income to have been subject to effective taxation. As regards French social security contributions, the granting of a tax credit equal to their amount is not subject to the condition that the income subject to these contributions has been included in the base of an equivalent or similar tax in the UNITEDKINGDOM.

In a ruling handed down on February 12, 2020 (no. 435907), the French State Council (“Conseil d’Etat”) clarified the contours of the tax credit intended to eliminate the double taxation provided for in the treaty between France and the United Kingdom.

The tax credit for residents of FRANCE is equal to the amount of French tax corresponding to income taxable in the UNITED KINGDOM. Income qualifying for the tax credit is income included in the UK tax base, without the person concerned being exempt on account of his or her status or activity. In the absence of a condition of effective taxation in the UNITED KINGDOM, social security contributions must be counted among the taxes giving entitlement to the credit.

  • Tax credit for UK tax residents :

When a person becomes tax resident in the UNITED KINGDOM and continues (or starts) to receive income and/or gains abroad, there is generally an obligation to submit a UK tax return.

The fact that an individual resident in the UNITED KINGDOM is only taxable on foreign-source income if the latter is repatriated to the UNITED KINGDOM, the person must file the tax declaration in both countries.
At the same time, such a person is not deprived of the status of resident within the meaning of the current treaty insofar as such income is theoretically taxable in the UNITED KINGDOM subsequent to the year in which it is received.

Similarly, tax residency is not conditional on unlimited tax liability in the country of residence, as the French State Council (“Conseil d’Etat”) considers that the decisive criterion for qualifying as a tax resident is the taxpayer’s tax liability on the basis of the ties he or she has developed with the country of residence, and not the extent of the tax liability to which the taxpayer is subject there.

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International succession: Determining the applicable law in the context of an international succession

Posted on : January 15, 2024

International succession is a thorny issue. Many questions are raised concerning the settlement of international succession and the necessary procedures. What is the applicable law? The law of the country of which the deceased was a national? The law of the country where the deceased’s assets are located? The law of the country where the heirs reside?

International inheritance seems an almost impossible procedure. The settlement of international successions raises a few practical difficulties.

This is particularly true when it comes to determining the law applicable to international succession. The same applies to the taxation of assets arising from international successions. As such, mastery of these rules is of major interest when it comes to managing taxpayers’ assets.

Private international law was profoundly reshaped by the entry into force, on August 17, 2015, of European Regulation (EU) No. 650/2012 of July 4, 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and the creation of a European Certificate of Succession, known as the Succession Regulation.

In terms of conflict of laws, the European regulation has revolutionized practice in at least two respects:

  • On the one hand, it provides for the application of a single law to the entire succession, whereas domestic rules were based on the principle of splitting the connection between movable and immovable property;
  • Secondly, it opens up the possibility of choosing the law of succession in favor of the law of the nationality of the deceased, whereas French law prohibited any autonomy of will in this respect. These changes give a new dimension to the practitioner’s duty to advise.

The conflict-of-laws rules resulting from the European regulation are universal in nature, and have replaced domestic conflict-of-laws rules where the regulation is applicable. However, the latter continue to govern successions opened before August 17, 2015.

On the other hand, the taxpayer must check whether the estate is considered to be international, in other words, whether from his point of view it presents at least one foreign element such as, in particular :

  • foreign nationality of the deceased ;
  • habitual residence abroad ;
  • the presence of assets abroad ;

The European regulation has retained the principle of a unitary connection of the succession, the law applicable to the succession being that of the State of the place of habitual residence of the deceased, unless a choice is made in favor of the law of the nationality.

The practitioner should refer to article 21 of the aforementioned regulation, which lays down the following general rule:
“1 Unless otherwise provided in this Regulation, the law applicable to a succession as a whole shall be the law of the State in which the deceased had his habitual residence at the time of his death

2. Where, by way of exception, it is clear from all the circumstances of the case that, at the time of his death, the deceased was manifestly more closely connected with a State other than that whose law would be applicable by virtue of paragraph 1, the law applicable to the succession shall be that of that other State”.

In a decision dated September 21, 2022, published in the official journal of FRANCE (“bulletin”) (no. 19-15.438), the French Supreme court (“Cour de cassation”), on its First Civil Chamber reunited, validated this position, stating that:

“The law must be interpreted as meaning that a court of a Member State must declare of its own motion that it has jurisdiction under the subsidiary jurisdiction rule provided for in that provision. […] Consequently, a court of appeal which declares that the French court lacks jurisdiction to rule on the succession and appoint a succession agent, on the grounds that the deceased’s habitual residence was located in the United Kingdom, without raising of its own motion its subsidiary jurisdiction, is in breach of this text, even though it was clear from its findings that the deceased had French nationality and owned property located in France”.

Declaration of international succession in FRANCE

The declaration of international succession must be made using the appropriate forms. It must be filed within a specific timeframe.

The declaration of international succession must be filed :

  • within 6 months of the date of death if the death occurs in France ;
  • within 12 months in all other cases. There are, however, certain exceptions. This applies in particular to the deaths of residents of Mayotte and Réunion. For residents of these countries, the time limit may be extended to two years, depending on the place of death.

However, it is not necessary to file a declaration of inheritance if the gross estate assets are less than :

  • €50,000 for transmission to direct line heirs, the surviving spouse and the partner bound to the deceased by a civil solidarity pact (PACS), provided that these persons have not previously benefited from an unregistered or undeclared manual gift from the deceased;
  • €3,000 for other heirs.

The declaration of inheritance of a person who dies in a foreign country must be filed by the heirs within 12 months of the date of death with the Tax Receipt for Non-Residents. Inheritance tax must be paid at the same time. When the deceased and/or his heirs reside abroad, it is necessary to ascertain the existence and provisions of a bilateral international convention signed between France and the foreign country.

Below is a table showing the rates of inheritance tax on the net taxable portion after deduction of allowances:

  • Between spouses or partners :
2023 Rate  Deduction 
< 8.072 EUR  5%  0 EUR 
Between 8.072 EUR et 15.932 EUR  10 % 404 EUR 
Between 15.932 EUR et 31.865 EUR  15 % 1.200 EUR 
Between 31.865 EUR et 552.324 EUR  20 % 2.793 EUR 
Between 552.324 EUR et 902.838 EUR  30 % 58.026 EUR 
Between 902.838 EUR et 1.805.677 EUR  40 % 148.310 EUR 
> 1.805.677 EUR  45 % 238.594 EUR 
  • In direct line :
2023 Rate Deduction 
< 8.072 EUR  5%  0 EUR 
Between 8.072 EUR et 12.109 EUR  10 % 404 EUR 
Between 12.109 EUR et 15.932 EUR  15 % 1.009 EUR 
Between 15.932 EUR et 552.324 EUR  20 % 1.806 EUR 
Between 552.324 EUR et 902.838 EUR  30 % 57.038 EUR 
Between 902.838 EUR et 1.805.677 EUR  40 % 147.322 EUR 
> 1.805.677 EUR  45 % 237.606 EUR 
  • Between sisters and brothers, living or represented
2023 Rate  Deduction
< 24. 430 EUR 35 %  0 EUR 
> 24.430 EUR 45 %  2.443 EUR 

Nieces and nephews representing their deceased or relinquishing sibling benefit from the rate applicable between brothers and sisters for estates opened on or after January 1, 2007.

Where should an estate declaration be made in FRANCE?

In the case of an international estate, a declaration of inheritance must be made in FRANCE. The declaration of inheritance of a person domiciled outside France must be made to the tax authorities. The declaration and payment must be made to the non-resident department of the General Directorate of Public Finances (“Direction Générale des Finances Publiques”).

Taxation of an international estate

Determining the tax rules applicable to an international estate can raise a number of practical difficulties. In principle, the applicable tax regime is that of the country where the deceased is domiciled. It is therefore normally this state that will have the right to tax the assets owned by the deceased on the day of his death. However, certain specific features of international taxation apply. Real estate is taxed in the country where it is located. Thus, in principle, in the context of an international succession, FRANCE will retain the right to tax real estate located on its territory.

FRANCE will also have the right to tax heirs or legatees if they have been domiciled in France for tax purposes for at least 6 of the last 10 years prior to the transfer. However, there may be several situations where the deceased’s assets are taxed in two countries, leading to a situation of double taxation. In such cases, FRANCE allows the tax paid abroad to be offset against the tax payable.

Specific rules for property in an international estate

Two situations need to be distinguished. The applicable rules differ according to whether the deceased was domiciled for tax purposes in FRANCE or outside FRANCE.

The deceased was domiciled in France for tax purposes :

All inherited movable and immovable property, whether located in FRANCE or abroad, is taxable in FRANCE. This principle therefore applies regardless of where the deceased was domiciled at the time of inheritance.

The deceased was domiciled for tax purposes outside FRANCE :

If the heir is not domiciled for tax purposes in FRANCE at the time of the succession or has not been domiciled in FRANCE for at least six years during the ten years preceding the succession, he must pay inheritance tax on movable and immovable property inherited in FRANCE. This applies whether he/she owns them directly or indirectly. This applies, for example, to French public funds, interest shares, trust assets or rights, French debts, and securities.

If the heir is domiciled in FRANCE for tax purposes at the time of the transfer and has been so for at least six of the ten years preceding the transfer, he will be liable for inheritance tax on the movable and immovable property he inherits, both inside and outside FRANCE. This applies, for example, to public funds, interest shares, fiduciary property or rights, debts and, in general, to all French or foreign securities.







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Musée National Eugène Delacroix
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Les amis du musée