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Luxembourg-France Double Tax Treaty

Luxembourg-France Double Tax Treaty

Luxembourg and France have signed a treaty for the avoidance of double taxation with respect to taxes on income and capital. This is just one of the bilateral tax agreements between Luxembourg and a number of countries worldwide. The general scope of the treaty is to protect citizens of both countries against double taxation, at the same time preventing fiscal evasion.

Our Luxembourg attorneys can give you detailed information about how the treaty influences your business, if you are a French investor in Luxembourg or vice versa. 

Taxes covered by the treaty

The double tax treaty signed between Luxembourg and France covers a series of taxes in each country. In the case of Luxembourg, the taxes are:

– the individual income tax;

– the corporate tax;

– the special tax on director’s fees;

– the capital tax;

– municipal taxes on income and capital;

For France, the convention applies for the following taxes:

– the persona income tax;

– the complementary tax;

– the corporate tax;

– withholding taxes and prepayments creditable against the aid taxes.

The treaty also applies to any taxes that may be levied in place of or additional to the ones above, after the convention was signed. The two countries have the obligation to announce and changes in their taxation system. Our Luxembourg lawyers can give you additional information about the taxation principles in the Grand Duchy. 

Other provisions of the convention 

For the purpose of the double tax treaty between France and Luxembourg, a taxable “person” can refer to an individual, corporate entity or a body of individuals. A permanent establishment that is taxed under the applicable laws of the countries can be a place of management, a branch, an office or a factory.

Income from immovable properties and profits from agricultural and forestry activities will be taxed only in the state in which the property is situated or where the activity takes place. If a company has offices in both countries, each country can only tax the income derived from activities performed in the country. The treaty also sets a taxation policy for dividends paid by a company which is incorporated in one of the states to a resident company of the other state. These can be taxed in the state where the payment is made.

For more information about the provisions of the double tax treaty between Luxembourg and France, you can contact our Luxembourg law firm.