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This page is intended to keep our nonresident contacts informed of pertinent legislative developments or new legal precedents concerning international affairs which may impact their operations and require preemptive action.

Published on Friday 07/09/2018

The fraudulent concealment of assets in trusts, brought out into the open by the dispute between the widow of Daniel Wildenstein and her two stepsons in connection with the settlement in France of the estate of the well-known deceased art dealer, led French lawmakers to institute a tax framework in France for assets placed in trusts set up abroad.

Case law concerning trusts, which were hitherto not recognized by French law, fully accepted their provisions in France without ever considering them as contrary to French international public policy, unless their effects infringed the reserved share under public policy in domestic law if they concerned real estate assets located in France covered by the French law of succession. 


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Published on Wednesday 14/06/2017

A legal document drafted in one State cannot be effective in another State unless the legalisation formality is completed. It shall be noted that regarding court decisions, an enforcement formality will in principle be necessary for a judgement rendered abroad to be enforceable in another country.


We will successively examine the general regime of legalisation, and then its simplified version (Apostille) (I), exemptions (II) and the effects of the absence of legalisation (III).



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See also our product information sheet on the powers of attorney issued in France for use abroad.


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Tags : International law Personal wealth Contract Sale

Published on Wednesday 02/11/2016

French decree no. 2016-567 of 10 May 2016 created, via Article 1649 AB of the French Tax Code, a "public register of trusts", with the aim of achieving transparency and combating tax fraud and evasion (particularly by preventing use of dummy corporations). The conditions for implementing the register were stipulated by an order of 21 June 2016. An interim order of the Council of State and a recent decision by the Constitutional Council have put an end to this system before it became fully operational.


The legislation sought to compile a register of trusts when one of the elements of the common law mechanism was in France, i.e.:

- the parties if at least one of them (trustee, settlor or beneficiary) had tax residency in France;

- the object of the trust if it included an asset or right located in France.


The public register of trusts was supposed to contain the following information:

- name and address of the trust;

- date of establishment and end date of the trust;

- date and nature of the trust declaration mentioned in Article 1649 AB of the French Tax Code;

- and information identifying the three parties to the trust (settlor, beneficiary and trustee).  


The register was supposed to go online on 5 July 2016. By an order of 22 July, the Council of State suspended implementation of the decree (and thus the creation of the register), based on the risks of infringing the privacy of the applicant given that the register could allow public access to personal data (such as testamentary intentions).


The Constitutional Council to which a QPC (question on the conformity of a law with the Constitution) had been submitted at the same time, handed down a decision on 21 October 2016, considering that the public register of trusts as planned by the legislative provisions was unconstitutional. Although the register pursues the constitutional objective of fighting tax fraud and evasion, the lack of limitation on the group of people who would have access to it "restricts [the right to privacy] in a way that is manifestly disproportionate to the objective pursued". As a result, the decree was immediately repealed.


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Tags : Trust Taxation

Published on Wednesday 16/09/2015

When a taxpayer derives income or owns assets in another country than his country of residence, there is a risk of taxation of the estate in both countries involved. Indeed, even when a tax convention exists, each state keeps its right to tax according to its own taxation rules unless the tax convention opposes it.

International juridical double taxation can be avoided two ways: either some categories of goods are chargeable only in the state of location or the state of residence ("principle of exemption" ), or the tax paid in one state is deducted from the tax due in the other state ("principle of credit" ).

Principle of exemption

The principle of exemption may be applied by two main methods:

  1.    The income which may be taxed in State S (i.e. location of the goods) is not taken into account at all by State R (i.e. residence of the deceased or heirs) for the purposes of its tax (“full exemption”)

  2.    The income which may be taxed in State S is not taxed by State R, but State R retains the right to take that income into consideration when determining the tax to be imposed on the rest of the income (“exemption with progression”).

Principle of credit

The principle of credit may be applied by two main methods:

  1.    State R allows the deduction of the total amount of tax paid in the other State on income which may be taxed in that State (“full credit”)

  2.    The deduction given by State R for the tax paid in the other State is restricted to that part of its own tax which is appropriate to the income which may be taxed in the other State (“ordinary credit”).


Thus, in the case of a non resident deriving income from France or owning capital in France, the tax convention must be applied in the following way:

  1.    Are the goods/Is the income chargeable in France according to French international taxation rules

  2.    If so, does the tax convention exclude the imposition in France? (e.g. if the convention states "(...) shall be taxed in the country of residence", France keeps its right to tax ; if the convention states "(...) shall be taxed only in the country of residence", France's right to tax is exluded)

  3.    If France has the right to tax the income or the capital, how is double taxation avoided? If there is a tax credit in the country of residence, all the necessary information and documents have to be transferred to client's counsels in his country of residence.


As a general rule, an international situation is always a complex one and will need the collaboration of the client's counsel in his country of residence.


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Tags : International tax law

Published on Tuesday 18/08/2015

In a judgment of 26 February 2015, the ECJ decided that the CSG and CRDS are social security contributions and not taxes. Therefore, they fall within the scope of Regulation EC No 1408/71 and must therefore be recovered in the State where the taxpayer makes contributions to a social security scheme.

Thus, foreign nationals residing in France who contribute to a foreign social security scheme are not liable to social security contributions on their income from assets in France.  Thus, they are entitled to obtain reimbursement through  claim  under Article R196-1 of the French LPF which must be filed before the December 31 of the second year following the payment of levies. Therefore the deadline will expire December 31, 2015 for deads signed in 2013, on December 31, 2016 for deads signed in 2014 and 31 December 2017 for deads  signed in 2015.

If France has taken note of the condemnation in a press release dated February 26, 2015, the fact remains that the French Government intends to take no action before the Conseil d'Etat has ruled on the basis of that decision. The Conseil d'Etat agreed with the ECJ on July 27 th 2015. The update will be published when the government has issued position. 


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Tags : Taxation

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The interdisciplinary expertise of the Selarl Bruno Bedaride, notaire in Paris covers the following areas: corporate law, international contracts law, legal and tax advice, advice for international transmission, real estate law, family office, real estate and company finance law. We offer more particularly our services to non residents or foreign company who wish to invest, move or create a business in France.