Double Tax Treaty between Luxembourg & France

Agreement

between the Government of the Grand Duchy of Luxembourg and the Government of the French Republic for the avoidance of double taxation and the prevention of fiscal evasion and fraud with respect to taxes on income and on capital, and the Protocol relating thereto,

made in Paris, on March 20, 2018

 

THE GOVERNMENT OF THE GRAND DUCHY OF LUXEMBOURG

AND

THE GOVERNMENT OF THE FRENCH REPUBLIC

 

ANXIOUS to promote their economic relations and improve their cooperation in tax matters,

INTENDING to conclude a Convention for the elimination of double taxation with respect to taxes on income and on capital without creating possibilities of non-taxation or of taxation reduced by tax avoidance or evasion (including by treaty shopping mechanisms intended to obtain the relief provided for in this Convention for the indirect benefit of residents of third States),

Have agreed on the following provisions:

ARTICLE 1 

PERSONS CONCERNED

1.This Convention applies to persons who are residents of a Contracting State or of both Contracting States.

 

2.For the purposes of the application of this Convention, income received by or through a partnership with or without legal personality or any other similar entity with legal personality (including a group of persons) considered to be wholly or partially transparent for tax purposes under the tax laws of one of the Contracting States is considered to be the income of a resident of a Contracting State, but only to the extent that such income is treated, for tax purposes by that state, as the income of a resident of that state. When the partnership with or without legal personality or any other similar entity with legal personality (including a group of persons) which is considered to be totally or partially transparent for tax purposes according to the tax legislation of one of the Contracting States is established in a third State,however, the income can only be considered as the income of a resident of a Contracting State if that third State also considers as totally or partially transparent from a tax standpoint the partnership with or without legal personality or any other similar entity endowed with legal personality (including a group of persons) and if it has concluded with the Contracting State from which the income comes an administrative assistance agreement with a view to combating tax fraud and tax evasion .

The provisions of this paragraph do not apply to income received by or through a partnership with or without legal personality or any similar entity with legal personality (including a group of persons) which is a resident of France in accordance with paragraph 4 of Article 4.

The provisions of this paragraph in no way affect the right of a Contracting State to tax its own residents.

ARTICLE 2 

TAXES COVERED

1.This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State, of its local or territorial communities, whatever the system of collection.

 

2.Taxes on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable property, are regarded as taxes on income and on capital. or real estate, as well as capital gains taxes.

 

3.The current taxes to which the Convention applies are in particular:

To) with regard to France:

i) income tax;
ii) corporation tax;
iii) corporate tax contributions;
iv) generalized social contributions and contributions for the repayment of social debt;
v) wealth tax;

including all withholding taxes and advances deducted from these taxes;

(hereinafter referred to as “French tax”);

b) with regard to the Grand Duchy of Luxembourg:

i) personal income tax;
ii) corporate income tax;
iii) wealth tax; and
iv) municipal business tax;

(hereinafter referred to as “Luxembourg tax”).

4.The Convention also applies to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replace existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes made to their tax laws.

 

ARTICLE 3 

GENERAL DEFINITIONS

1.For the purposes of this Convention, unless the context requires a different interpretation:

To) the expressions “Contracting State” and “other Contracting State” mean, as the case may be, France or Luxembourg;
b) the term “France” designates the European departments of the French Republic and the communities governed by Article 73 of its Constitution, including the territorial sea located off these departments and these communities, and beyond the sea territorial, the marine spaces over which the French Republic exercises, in accordance with international law, its jurisdiction or sovereign rights for the purposes of the exploration and exploitation of the natural resources of the seabed, their subsoil and the overlying waters;
vs) the term “Luxembourg” designates the Grand Duchy of Luxembourg and, when used in a geographical sense, it designates the territory of the Grand Duchy of Luxembourg;
d) the term “person” includes an individual, a company and any other body of persons;
e) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;
f) the term “business” applies to the exercise of any activity or business;
g) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
h) the expression “international traffic” means any transport carried out by a ship, aircraft or rail vehicle operated by an enterprise the place of effective management of which is situated in a Contracting State, except when such transport is effected only between points located in the other Contracting State;
i) the expression “competent authority” means:

i) in the case of France, the Minister of Finance or his authorized representative;
ii) in the case of Luxembourg, the Minister of Finance or his authorized representative;
j) the term “national”, in relation to a Contracting State, means:

(i) any natural person who has the nationality or citizenship of that Contracting State; and
(ii) any legal person, partnership or association constituted in accordance with the legislation in force in that Contracting State;
k) the terms “activity”, in relation to an enterprise, and “business” include the exercise of liberal professions as well as the exercise of other activities of an independent character.

2.For the application of the Convention at a given time by a Contracting State, any term or expression which is not defined therein has, unless the context requires a different interpretation, the meaning assigned to it at that time by law. of that State concerning the taxes to which the Convention applies, the meaning attributed to this term or expression by the fiscal law of that State prevailing over the meaning attributed to it by other branches of the law of that State.

 

ARTICLE 4 

RESIDENT

1.For the purposes of this Convention, the expression “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax in that State by reason of his domicile, his residence, its place of management, its place of operation or any other criterion of a similar nature and also applies to that State as well as to all its local or territorial communities and to legal persons governed by public law of that State , of its local or regional authorities. However, this expression does not include persons who are subject to tax in that State only on income from sources situated in that State or on capital situated there.

 

2.Where, in accordance with the provisions of paragraph 1, a natural person is a resident of both Contracting States, his situation shall be settled as follows:

To) this person is considered to be a resident only of the State in which he has a permanent home; if he has a permanent home in both states, he is considered a resident only of the state with which his personal and economic ties are closest (center of vital interests);
b) if the State in which that person has the center of his vital interests cannot be determined, or if he does not have a permanent home in any of the States, he shall be regarded as a resident only of the State where she stays in the usual way;
vs) if this person is habitually resident in the two States or if he does not habitually reside in either of them, he shall be considered as a resident only of the State of which he is a national;
d) if this person possesses the nationality of both States or if he does not possess the nationality of either of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

3.Where, in accordance with the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, it shall be deemed to be a resident only of the State in which its place of effective management is situated.

 

4.The expression “resident of a Contracting State” includes, when that Contracting State is France, any partnership, group of persons or other similar entity:

 

To) whose place of effective management is in France;
b) who is subject to tax in France; and
vs) in which all unitholders, partners or members are, in application of French tax legislation, personally subject to tax at the rate of their share in the profits of these partnerships, groups of persons or other similar entities.

5.A person, in particular a trustee or fiduciary, who, although meeting the definition in paragraphs 1, 2, 3 and 4 above, is not considered to be resident of a Contracting State for the purposes of this article, is only the apparent beneficiary of the income, said income actually benefiting, either directly or indirectly through other natural or legal persons, a person who cannot himself be regarded as a resident of that State within the meaning of this article .

 

ARTICLE 5 

STABLE ESTABLISHMENT

1.For the purposes of this Convention, the expression “permanent establishment” means a fixed place of business through which an enterprise carries out all or part of its activity.

 

2.The term “permanent establishment” includes especially:

To) a seat of management,
b) branch,
vs) a desk,
d) factory,
e) a workshop and
f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

3.A construction or assembly site only constitutes a permanent establishment if its duration exceeds twelve months.

3.1For the sole purpose of determining whether the 12-month period referred to in paragraph 3 has been exceeded,

To) when an enterprise of a Contracting State carries on activities in the other Contracting State at a place which constitutes a construction or assembly site and these activities are carried on for one or more periods which, in total, exceed 30 days without exceed twelve months, and
b) when related activities are carried out on the same construction or assembly site for different periods of more than 30 days each by one or more undertakings closely linked to the first undertaking,

these different periods are added to the total period during which the first company carried out activities on this construction or assembly site.

 

4.Notwithstanding the preceding provisions of this article, it is considered that there is no “permanent establishment” if:

To) facilities are used for the sole purpose of storing , displaying or delivering goods belonging to the company;
b) goods belonging to the company are stored for the sole purpose of storage , display or delivery;
vs) goods belonging to the company are stored for the sole purpose of processing by another company;
d) a fixed place of business is used for the sole purpose of purchasing goods or gathering information, for the business;
e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity not listed in subparagraphs a) to d), provided that this activity is of a preparatory or auxiliary character;
f) a fixed place of business is used solely for the purposes of the cumulative exercise of the activities mentioned in subparagraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination keeps a preparatory or auxiliary character.

4.1Paragraph 4 shall not apply to a fixed place of business used or owned by an enterprise if the same enterprise or a closely related enterprise carries on business activities at the same place or at another place in the same Contracting State. and

To) when one of these installations constitutes a permanent establishment for the enterprise or for the closely related enterprise with regard to the provisions of this article, or
b) when the overall activity resulting from the combination of activities carried out by the two undertakings in the same installation, or by the same undertaking or closely related undertakings in the two installations, is not of a preparatory or auxiliary character,

provided that the business activities carried out by the two companies in the same installation, or by the same company or closely related companies in the two installations, constitute complementary functions which form part of a coherent set of activities of business.

 

5.Notwithstanding the provisions of paragraphs 1 and 2, but subject to the provisions of paragraph 6, where a person is acting in a Contracting State on behalf of an enterprise and, in doing so, habitually concludes contracts or habitually plays the leading role leading the conclusion of contracts which, on a routine basis, are concluded without material modification by the company, and that these contracts are

To) on behalf of the company, or
b) for the transfer of ownership of property belonging to that enterprise or for the granting of the right to use such property or property which the enterprise has the right to use, or
vs) for the provision of services by this company,

this enterprise is considered to have a permanent establishment in that State for all the activities that this person carries out for the enterprise, unless the activities of that person are limited to those mentioned in paragraph 4 and which, if they were exercised through a fixed place of business, would not allow that place to be considered as a permanent establishment under the provisions of this paragraph.

 

6.

To) Paragraph 5 does not apply where the person who acts in a Contracting State on behalf of an enterprise of the other Contracting State carries out in the first State a business activity as an independent agent and acts for the enterprise in the ordinary framework of this activity. However, when a person acts exclusively or almost exclusively on behalf of one or more undertakings with which he is closely related, that person is not considered to be an independent agent within the meaning of this paragraph with regard to each of these companies.
b) For the purposes of this article, a person is closely related to an enterprise if, having regard to all the relevant facts and circumstances, one is under the control of the other or both are under the control of the same people or companies. In all cases, a person is considered to be closely related to a company if one holds directly or indirectly more than 50% of the effective rights or participations in the other (or, in the case of a company, more than 50% % of the total voting rights and value of the company’s shares or of the effective rights or holdings in the company’s equity), or if another person directly or indirectly holds more than 50% of the effective rights or holdings ( or, in the case of a corporation,

7.The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business there (whether through an establishment stable or not) is not in itself sufficient to make any one of these companies a permanent establishment of the other.

 

ARTICLE 6 

REAL ESTATE INCOME

1.Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

 

2.The expression “immovable property” has the meaning assigned to it by the law of the Contracting State in which the property in question is situated. The expression includes in all cases the accessories, the livestock and the equipment of agricultural and forestry operations, the rights to which the provisions of private law apply concerning land ownership, the usufruct of immovable property and the rights to variable payments. or fixed for the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources; ships, aircraft and rail vehicles are not considered real property.

 

3.The provisions of paragraph 1 apply to income derived from the direct exploitation, rental or leasing, as well as from any other form of exploitation of immovable property.

 

4.The provisions of paragraphs 1 and 3 also apply to income from the immovable property of an enterprise.

 

ARTICLE 7 

BUSINESS BENEFITS

1.The profits of an enterprise of a Contracting State may be taxed only in that State, unless the enterprise carries on its activity in the other Contracting State through a permanent establishment situated there. If the enterprise carries on its business in such a way, the profits which are attributable to the permanent establishment in accordance with the provisions of paragraph 2 may be taxed in the other State.

2.For the purposes of this article and of article 22, the profits which are attributable in each Contracting State to the permanent establishment mentioned in paragraph 1 are those which it could have made, in particular in its internal transactions with other parties. of the company, if it had formed a separate and independent company carrying out identical or similar activities under identical or similar conditions, taking into account the functions performed, the assets used and the risks assumed by the company through the intermediary of the permanent establishment and other parts of the business.

 

3.Where, in accordance with paragraph 2, a Contracting State adjusts the profits which are attributable to a permanent establishment of an enterprise of one of the Contracting States and accordingly taxes profits of the enterprise which have been taxed in the other State, that other State makes an appropriate adjustment to the amount of tax which has been levied on such profits to the extent necessary to eliminate double taxation of such profits. To determine this adjustment, the competent authorities of the Contracting States shall consult each other if necessary.

 

4.Where profits include items of income treated separately in other articles of this Convention, the provisions of those articles shall not be affected by the provisions of this article.

 

ARTICLE 8 

INTERNATIONAL TRANSPORT

1.Profits from the operation, in international traffic, of ships, aircraft or railway vehicles are taxable only in the Contracting State where the place of effective management of the enterprise is situated.

 

2.If the place of effective management of a shipping enterprise is on board a ship, this place of business shall be deemed to be situated in the Contracting State in which the home port of that ship is located, or failing that there is a port of home, in the Contracting State of which the operator of the ship is a resident.

 

3.The provisions of paragraph 1 shall also apply to profits derived from the participation in a group (“pool”), a joint business or an international operating agency.

 

ARTICLE 9 

ASSOCIATED COMPANIES

1.When :

To) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and of an enterprise of the other Contracting State,

and that, in either case, the two companies are, in their commercial or financial relations, bound by conditions agreed or imposed, which differ from those which would be agreed between independent companies, the profits which, without these conditions, would have been fulfilled by one of the undertakings but could not in fact be fulfilled because of these conditions, can be included in the profits of that undertaking and taxed accordingly.

 

2.Where a Contracting State includes in the profits of an enterprise of that State – and taxes accordingly – profits on which an enterprise of the other Contracting State has been taxed in that other State, and the profits so included are profits which would have been realized by the enterprise of the first State if the conditions agreed between the two enterprises had been those which would have been agreed between independent enterprises, the other State makes an appropriate adjustment of the amount of tax therein. been levied on these profits. In determining this adjustment, account shall be taken of the other provisions of this Convention and, if necessary, the competent authorities of the Contracting States shall consult each other.

 

ARTICLE 10 

DIVIDENDS

1.Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2.

To) However, dividends paid by a company which is a resident of a Contracting State may also be taxed in that State under the laws of that State; but the tax thus established may not exceed 15% of the gross amount of the dividends if the beneficial owner is a resident of the other Contracting State.
b) Notwithstanding the provisions of a), dividends paid by a company which is a resident of a Contracting State may only be taxed in the other Contracting State if the beneficial owner of the dividends is a company which is a resident of that other Contracting State. and which directly holds at least 5% of the capital of the company paying the dividends for a period of 365 days including the day of payment of the dividends (no account is taken, for the purposes of calculating this period, of changes in shareholding which would result directly from a reorganization, such as a merger or a split of the company which holds the shares or which pays the dividends).
vs) This paragraph does not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3.The term “dividends” used in this article designates income from shares, shares or profit-sharing certificates, mine shares, founder’s shares or other beneficiary shares with the exception of claims, as well as income subject to the tax regime. distributions by the tax legislation of the State of which the distributing company is a resident.

 

4.The provisions of paragraphs 1 and 2 do not apply when the beneficial owner of the dividends, resident in a Contracting State, exercises in the other Contracting State of which the company paying the dividends is a resident, a business activity by through a permanent establishment located there, and that the dividend-generating participation actually attaches to it. In this case, the provisions of article 7 are applicable.

 

5.Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not levy any tax on the dividends paid by the company, except to the extent that such dividends are paid to a resident of that other State or to the extent that the dividend-generating participation is effectively attached to a permanent establishment situated in that other State, nor levy any tax, for the taxation of retained earnings, on the profits of the company, even if the dividends paid or the undistributed profits consist wholly or in part of profits or income from that other State.

 

6.

To) Dividends paid from income or gains derived from immovable property within the meaning of Article 6 by an investment vehicle established in a Contracting State,

i) who distributes the largest portion of these revenues annually, and
ii) whose income or gains from such real estate are tax exempt,

to a resident of the other Contracting State may be taxed in that other State.

b) However, these dividends are also taxable in the first Contracting State according to the laws of that State; but the tax thus established may not exceed 15% of the gross amount of the dividends if the beneficial owner is a resident of the other Contracting State and if he directly or indirectly holds a participation representing less than 10% of the capital of this vehicle.

When the beneficial owner of such dividends holds, directly or indirectly, a participation representing 10% or more of the capital of this vehicle, the dividends are taxable at the rate provided for by the national legislation of the Contracting State from which they originate.

 

Article 11 

INTEREST

1.Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed only in that other State.

 

2.The term “interest” used in this article designates income from debts of any kind, whether or not accompanied by mortgage guarantees or a profit-sharing clause of the debtor, and in particular income from public funds and loan obligations. , including the bonuses and prizes attached to these securities. Penalties for late payment are not considered as interest within the meaning of this article.

 

3.The provisions of paragraph 1 shall not apply when the beneficial owner of the interest, resident in a Contracting State, carries on in the other Contracting State from which the interest arises, a business activity through the intermediary of a permanent establishment located there, and that the interest-generating claim is actually attached to it. In this case, the provisions of article 7 are applicable.

 

4.When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of interest, taking into account the claim for which they are paid, exceeds that of which agreed between the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account the other provisions of this Convention.

 

ARTICLE 12

 FEES

1.Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

 

2.However, these royalties are also taxable in the Contracting State from which they originate and according to the legislation of that State; but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so established may not exceed 5% per cent of the gross amount of the royalties.

 

3.The term “royalties” used in this article means remuneration of any kind paid for the use or the concession of the use of a copyright in a literary, artistic or scientific work, including cinematographic films, a patent, trademark, design, plan, secret formula or process and for information relating to acquired experience in the industrial, commercial or scientific field.

 

4.The provisions of paragraphs 1 and 2 do not apply when the beneficial owner of the royalties, resident in a Contracting State, exercises in the other Contracting State from which the royalties originate, a business activity through the intermediary of ‘a permanent establishment located there and that the right or the property generating the royalties actually attaches to it. In this case, the provisions of article 7 are applicable.

 

5.When, by reason of special relations existing between the debtor and the beneficial owner or that both have with third parties, the amount of the royalties, taking into account the service for which they are paid, exceeds that of which agreed between the debtor and the beneficial owner in the absence of such a relationship, the provisions of this article only apply to the latter amount. In this case, the excess part of the payments remains taxable according to the legislation of each Contracting State and taking into account the other provisions of this Convention.

 

6.Royalties are considered to arise from a Contracting State when the debtor is a resident of that State. However, when the debtor of the royalties, whether or not he is a resident of a Contracting State, has a permanent establishment in a Contracting State, for which the obligation giving rise to the royalties has been contracted and which bears the burden of these royalties, these are considered as coming from the State where the permanent establishment is located.

 

ARTICLE 13 

CAPITAL GAINS

1.Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

 

2.Gains from the alienation of movable property which form part of the assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of this permanent establishment (alone or with the whole company), are taxable in that other State.

 

3.Gains from the alienation of goods which form part of the assets of an enterprise and which are ships, aircraft or railway vehicles operated by that enterprise in international traffic or movable property assigned to the operation of these ships, aircraft or railway vehicles are taxable only in the Contracting State where the place of effective management of the enterprise is situated.

 

4.Gains derived by a resident of a Contracting State from the alienation of shares, shares or other rights in a company, trust or any other institution or entity may be taxed in the other Contracting State if at any time during the 365 days preceding the alienation, these shares, units or other rights derive more than 50% of their value, directly or indirectly, from immovable property, as defined in article 6, located in that other State.

For the application of this provision, immovable property assigned by such a company, trust or entity to its own business activity is not taken into consideration.

 

5.Gains which an individual who is a resident of a Contracting State derives from the alienation of shares or units forming part of a substantial participation in the capital of a company which is a resident of the other State contracting party are taxable in that other State.

It is considered that there is a substantial participation when the transferor, alone or with related or related persons, has directly or indirectly shares, units or other rights, the whole of which gives right to 25% or more of the profits of the company. company.

For the purposes of this paragraph, only gains from the alienation of shares or units held by a resident of a Contracting State who has been a resident of the other State at any time during the five years preceding the said alienation.

 

6.Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5 may be taxed only in the Contracting State of which the transferor is a resident.

 

ARTICLE 14 

EMPLOYMENT INCOME

1.Subject to the provisions of Articles 15, 17 and 18, wages, salaries and other similar remuneration which a resident of a Contracting State receives in respect of paid employment shall be taxable only in that State, unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

 

2.Notwithstanding the provisions of paragraph 1, remuneration which a resident of a Contracting State receives in respect of paid employment exercised in the other Contracting State may be taxed only in the former State if:

To

the beneficiary stays in the other State for a period or periods not exceeding in the aggregate 183 days during any twelve month period beginning or ending in the fiscal year concerned, and
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
the cost of remuneration is not borne by a permanent establishment which the employer has in the other State.

3.Notwithstanding the foregoing provisions of this article, remuneration received in respect of salaried employment carried out on board a ship, an aircraft or a railway vehicle operated in international traffic, may be taxed in the Contracting State where the the place of effective management of the company is located.

 

ARTICLE 15 

TANTIEMS

Directors’ fees, attendance fees and other similar remuneration received by a resident of a Contracting State in his capacity as a member of the board of directors or supervisory board of a company which is a resident of the other Contracting State may be taxed in this other state.

 

ARTICLE 16 

ARTISTS, ATHLETES AND MODELS

  1. Notwithstanding the provisions of Article 14, the income which a resident of a Contracting State derives from his personal activities carried on in the other Contracting State as a performing artist, such as a theater or film artist , radio or television, or a musician, or as an athlete or model, are taxable in that other State.

Notwithstanding the provisions of Articles 14 and 20, when an artist, a sportsman or a model, resident of a Contracting State, derives from the other Contracting State income corresponding to services not independent of his professional reputation, this income is taxable in that other State.

However, the income that a resident of a Contracting State derives from the activities or services referred to in the preceding paragraphs is taxable only in that State when the gross amount of such income does not exceed 20,000 euros for the year of tax concerned.

 

2.When the income from activities or corresponding to the services referred to in paragraph 1 is attributed not to the artist, athlete or model but to another person, resident or not of a Contracting State, such income may be taxed, notwithstanding the provisions of Article 14 in the Contracting State where the activities or services of the artist, athlete or model are carried out, provided or used.

 

  1. Notwithstanding the provisions of paragraphs 1 and 2, income which a resident of a Contracting State, artist, athlete or model, derives from activities or services exercised or used in the other Contracting State may be taxed only in the first State. when these activities or services in the other State are financed mainly by public funds of the first State or of its local or territorial communities, or of their legal persons governed by public law, including in cases where this income is attributed not to the artist, athlete or model himself but to another person, whether or not he is a resident of a Contracting State.

 

ARTICLE 17

 PENSIONS

  1. Subject to the provisions of paragraph 2 of Article 18, pensions and other similar remuneration paid to a resident of a Contracting State in respect of previous employment shall be taxable only in that State.

 

  1. Notwithstanding the provisions of paragraph 1, pensions and other sums paid under the social security legislation of a Contracting State may be taxed only in that State.

 

ARTICLE 18

 PUBLIC OFFICES

1.

To) Salaries, wages and other similar remuneration paid by a Contracting State or one of its local or territorial communities or by one of their legal persons governed by public law to a natural person for services rendered to this State, community or legal person are taxable only in that state.
b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and if the natural person is a resident of that State and possesses its nationality without at the same time possessing the nationality. nationality of the first state.

2.

To) Notwithstanding the provisions of paragraph 1, pensions and other similar remuneration paid by a Contracting State or one of its local or territorial communities or by one of their legal persons governed by public law, either directly or by deduction from funds which they constituted, to a natural person for services rendered to this State, a community or legal person are taxable only in this State.
b) However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the natural person is a resident of that State and possesses its nationality without at the same time possessing the nationality of the first State.

3.The provisions of Articles 14, 15, 16 and 17 apply to wages, salaries, pensions and other similar remuneration paid for services rendered in the course of a business activity carried on by a Contracting State or one of its local or territorial communities or legal persons governed by public law.

 

ARTICLE 19 

STUDENTS

The sums that a student, apprentice or trainee who is, or who was immediately before going to a Contracting State, a resident of the other Contracting State and who stays in the first State for the sole purpose of continuing there his studies or training, received to cover his maintenance, study or training costs are not taxable in that State, provided that they come from sources located outside that State.

 

ARTICLE 20 

OTHER REVENUES

1.Items of income of a resident of a Contracting State, wherever they arise, which are not dealt with in the preceding articles of this Convention shall be taxable only in that State.

 

2.The provisions of paragraph 1 do not apply to income other than income from immovable property as defined in paragraph 2 of article 6, when the beneficiary of such income, resident of a Contracting State, exercises in the other Contracting State, a business activity through the intermediary of a permanent establishment situated there and that the right or the income-generating property actually attaches to it. In this case, the provisions of article 7 are applicable.

ARTICLE 21 

FORTUNE

1.The fortune constituted by immovable property referred to in Article 6, owned by a resident of a Contracting State and which is situated in the other Contracting State, may be taxed in that other State.

 

2.The fortune constituted by movable property which forms part of the assets of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, may be taxed in that other State.

 

3.The fortune constituted by ships, aircraft and railway vehicles operated in international traffic, as well as movable property assigned to the operation of these ships, aircraft or railway vehicles, is taxable only in the Contracting State where the the place of effective management of the company is located.

 

4.All other elements of the capital of a resident of a Contracting State are taxable only in that State.

 

Article 22 

ELIMINATION OF DOUBLE TAXATION

1.For France, double taxation is eliminated as follows:

To) Notwithstanding any other provision of this Convention, income received or assets owned by a resident of France which is taxable in Luxembourg, in accordance with the provisions of this Convention, is also taxable in France.

French tax is calculated after deduction of a tax credit equal to the amount of tax paid in Luxembourg on this income or fortune. However, this tax credit may not exceed the amount of French tax corresponding to this income or fortune.

The tax paid in Luxembourg is not deductible from the income received or the fortune owned by the resident of France.

b) Notwithstanding any other provision of this Convention, the income received or the fortune possessed by a resident of France which is taxable only in Luxembourg, in accordance with the provisions of this Convention, is also taxable in France. In this case, the resident of France is entitled to a tax credit attributable to French tax.

This tax credit is equal to the amount of French tax corresponding to this income or fortune of this resident, which is taxable only in Luxembourg. Residents of France who are not effectively subject to Luxembourg tax on this income or wealth cannot benefit from the tax credit.

vs) It is understood that the expression “amount of French tax corresponding to this income” used in a) and b) means:

when the tax due in respect of this income is calculated by applying a proportional rate, the product of the taxable amount of the net income considered by the rate which is actually applied to it;
when the tax due on the basis of this income is calculated by application of the progressive scale, the product of the taxable amount of the net income considered by the rate resulting from the ratio between the tax actually due on the basis of the overall net taxable income according to French law and the amount of aggregate net income.
This interpretation applies by analogy to the expression “French tax amount corresponding to this fortune” used in a) and b).
d) It is understood that the expression “amount of tax paid in Luxembourg on this income or this fortune” used in a) means the amount of Luxembourg tax actually borne on a definitive basis by reason of this income or this fortune. , in accordance with the provisions of the Convention, by the resident of France who is taxed on this income or fortune according to French law.

2.Subject to the provisions of Luxembourg law concerning the elimination of double taxation which do not affect the general principle, double taxation is eliminated as follows:

To) When a resident of Luxembourg receives income or has assets which, in accordance with the provisions of this Convention, are taxable in France, Luxembourg shall exempt such income or assets from tax, subject to the provisions of sub-paragraphs b) and c), but may, in order to calculate the amount of tax on the remainder of the resident’s income or capital, apply the same tax rates as if the income or capital had not been exempted.
b) When a resident of Luxembourg receives items of income which, in accordance with the provisions of Articles 10, 12 and 16, are taxable in France, Luxembourg grants on personal income tax or on income tax communities of this resident, a deduction of an amount equal to the tax paid in France. This deduction may not, however, exceed the fraction of the tax, calculated before deduction, corresponding to these items of income received from France.
vs) The provisions of subparagraph a) do not apply to income received or to assets owned by a resident of Luxembourg, when France applies the provisions of this Convention to exempt such income or assets from tax or applies the provisions of paragraph 2 of Article 10 or 12 to this income.

ARTICLE 23 

NON-DISCRIMINATION

1.Natural persons possessing the nationality of a Contracting State shall not be subject in the other Contracting State to any taxation or obligation relating thereto which is other or more onerous than those to which natural persons possessing the nationality of that State are or may be subject. other State which are in the same situation, in particular with regard to residence.

 

2.Stateless persons who are residents of a Contracting State shall not be subject in either Contracting State to any taxation or obligation relating thereto which is other or more onerous than those to which nationals of the State are or may be subject. State concerned who are in the same situation, in particular with regard to residence.

 

3.The taxation of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State is not established in that other State in a less favorable manner than the taxation of enterprises of that other State which carry out the same activity. This provision may not be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, allowances and tax reductions according to the situation or the family responsibilities which it grants to its own residents. 

.

4.Unless the provisions of paragraph 1 of article 9, paragraph 4 of article 11 or paragraph 5 of article 12 apply, interest, royalties and other expenses paid by an enterprise of a State contracting to a resident of the other Contracting State are deductible, for the determination of the taxable profits of this enterprise, under the same conditions as if they had been paid to a resident of the first State. Likewise, the debts of an enterprise of a Contracting State towards a resident of the other Contracting State are deductible, for the determination of the taxable fortune of this enterprise, under the same conditions as if they had been contracted towards a resident. of the first state.

 

5.Companies of a Contracting State, the capital of which is wholly or in part, directly or indirectly, owned or controlled by one or more residents of the other Contracting State, are not subject in the first State to any taxation or obligation therein. relative, which is different or heavier than those to which the other similar enterprises of the first State are or may be subject.

 

6.

To) When a natural person carries out activities in a Contracting State, the contributions which are paid by this person or on his behalf to a pension scheme

i) established and recognized for tax purposes in the other Contracting State,
ii) with which the person was affiliated immediately before starting to carry on activities in the first State,
iii) with which the person was affiliated at a time when he was employed in or residing in the other State, and
iv) which is assimilated by the competent authority of the first State to a pension scheme approved for tax purposes by that State,

are, with regard to:

v) the calculation of the personal tax due in the first State, and
vi) the calculation of the company’s results which are taxable in the first State,

treated in that State in the same way as contributions paid to a pension scheme recognized for taxable purposes in the former State and subject to the same conditions and restrictions. Notwithstanding the provisions of Article 1 of the Convention, this paragraph also applies to a natural person who is not a resident of the Contracting State in which he carries out the activities.

b) For the application of a):

i) the expression “retirement plan” designates a plan in which the natural person participates in order to benefit from retirement benefits payable for the employment referred to in a, and
ii) a pension plan is “recognized for tax purposes” in a contracting state if contributions to that plan give rise to tax relief in that state.

7.Nothing in this article may be considered as obliging one of the Contracting States to grant to persons who are not residents of that State the personal deductions, allowances or reductions which are granted, for the purposes of the tax. , to residents.

 

8.If a treaty or bilateral agreement to which the Contracting States are parties, other than this Convention, contains a non-discrimination clause or a most-favored-nation clause, it is understood that such clauses are not applicable in the matter. Fiscal.

 

9.The provisions of this article apply, notwithstanding the provisions of article 2, to taxes of any kind or denomination.

 

ARTICLE 24 

AMICABLE PROCEDURE

1.Where a person considers that the measures taken by a Contracting State or by both Contracting States result or will result for him or her in taxation not in accordance with the provisions of this Convention, he may, independently of the remedies provided for by the internal law of those States, submit his case to the competent authority of one or other of the Contracting States. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

 

2.The competent authority shall endeavor, if the complaint appears to it to be justified and if it is not itself able to find a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, for the avoidance of taxation which is not in accordance with the Convention. The agreement obtained is applied regardless of the time limits provided for by the internal law of the Contracting States.

 

3.The competent authorities of the Contracting States shall endeavor, by mutual agreement, to resolve any difficulties or to dispel any doubts which may arise in the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

 

4.The competent authorities of the Contracting States may communicate with each other directly, including within a joint commission composed of these authorities or their representatives, with a view to reaching an agreement as indicated in the preceding paragraphs.

 

5.When

To) under paragraph 1, a person has submitted a case to the competent authority of a Contracting State on the basis that the measures taken by a Contracting State or by both Contracting States have resulted in that person not being taxed. in accordance with the provisions of this Convention, and that
b) the competent authorities do not reach an agreement to resolve this case under paragraph 2 within two years from the date on which all the information requested by the competent authorities in order to be able to deal with the case has been communicated to both competent authorities,

unresolved issues raised by this case should be referred to arbitration if the person so requests in writing. These unresolved issues, however, should not be referred to arbitration if a decision on these issues has already been rendered by a judicial or administrative tribunal of one of the States. Unless a person directly concerned by the case does not accept the amicable agreement by which the arbitration decision is applied, this decision is binding on both Contracting States and must be applied regardless of the time limits provided for by domestic law. of these states. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this paragraph.

ARTICLE 25 

EXCHANGE OF INFORMATION

1.The competent authorities of the Contracting States shall exchange information likely to be relevant for the application of the provisions of this Convention or for the administration or application of the internal legislation relating to taxes of any kind or name levied on behalf of the Contracting States, their local or territorial authorities, insofar as the taxation provided for is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2.

 

2.Information received under paragraph 1 by a Contracting State shall be kept secret in the same manner as information obtained under the domestic law of that State and shall only be communicated to persons or authorities (including courts and administrative bodies ) concerned by the establishment or collection of the taxes mentioned in paragraph 1, by the proceedings or prosecutions relating to these taxes, by the decisions on appeals relating to these taxes, or by the control of the foregoing. These persons or authorities only use this information for these purposes. They may reveal this information in public court hearings or in judgments. Notwithstanding the above,

 

3.Each of the Contracting States shall take the necessary measures to ensure the availability of the information and the capacity of its competent authority to access it and transmit it to its counterpart.

The provisions of paragraphs 1 and 2 may in no case be interpreted as imposing on a Contracting State the obligation:

To) to take administrative measures at variance with its laws and administrative practice or those of the other Contracting State;
b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
vs) to provide information which would reveal a trade secret, industrial, professional or a trade process or information the communication of which would be contrary to public order.

4.If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use the powers at its disposal to obtain the requested information, even if it does not need it for its own tax purposes. The obligation in the preceding sentence is subject to the limitations provided for in paragraph 3, except where these limitations are likely to prevent a Contracting State from communicating information solely because it is of no interest to it in the context of national.

 

5.Under no circumstances may the provisions of paragraph 3 be interpreted as allowing a Contracting State to refuse to communicate information solely because it is held by a bank, another financial institution, an agent or a person acting as a agent or trustee or because such information relates to a person’s property rights.

 

ARTICLE 26 

ASSISTANCE IN TAX COLLECTION

1.The Contracting States assist each other in the recovery of their tax claims. This assistance is not limited by Articles 1 and 2. The competent authorities of the States may by mutual agreement settle the modalities of application of this Article.

 

2.The term “tax claim” as used in this article means an amount due in respect of taxes of any kind or denomination levied on behalf of the Contracting States, their local or territorial communities, insofar as the corresponding taxation is not contrary to this Convention or to any other instrument to which these Contracting States are parties, as well as the interest, administrative penalties and costs of collection or conservation relating to such taxes.

 

3.When a tax claim of a Contracting State is recoverable under the laws of that State and is due by a person who, at that date, cannot, under those laws, prevent its recovery, that tax claim is, at the request of the competent authorities of that State, accepted with a view to its recovery by the competent authorities of the other Contracting State. This tax claim is collected by that other State in accordance with the provisions of its legislation applicable to the recovery of its own taxes as if the claim in question were a tax claim of that other State.

4.When a tax claim of a Contracting State is a claim in respect of which that State may, under its law, take protective measures to ensure its recovery, this claim must, at the request of the competent authorities of that State State, be accepted for the purpose of adopting provisional measures by the competent authorities of the other Contracting State. That other State must take precautionary measures with regard to this tax claim in accordance with the provisions of its law as if it were a tax claim of that other State even if, at the time when these measures are applied, the tax debt is not recoverable in the first State or is due by a person who has the right to prevent its recovery.

 

5.Notwithstanding the provisions of paragraphs 3 and 4, the limitation periods and priority applicable under the law of a Contracting State to a tax claim by reason of its nature as such do not apply to a claim tax accepted by that State for the purposes of paragraph 3 or 4. In addition, a tax claim accepted by a Contracting State for the purposes of paragraph 3 or 4 may not have any priority in that State under the law of the other Contracting State.

6.Proceedings concerning the existence, validity or amount of a tax claim of a Contracting State are not submitted to the courts or administrative bodies of the other Contracting State.

 

7.Where at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other State has collected and transmitted the amount of the tax claim in question to the first State, that tax claim ceases to be:

To) in the case of a claim made under paragraph 3, a tax claim of the first State which is collectible under the laws of that State and is owed by a person who at that time is not entitled under the laws of that State, prevent its recovery, or
b) in the case of a claim made under paragraph 4, a fiscal claim of the first State in respect of which that State may, under its laws, take precautionary measures to secure its recovery

the competent authorities of the first State shall promptly notify this fact to the competent authorities of the other State and the first State, at the option of the other State, suspends or withdraws its request.

8.The provisions of this article may in no case be interpreted as imposing on a Contracting State the obligation:

To) to take administrative measures at variance with its laws and administrative practice or those of the other Contracting State;
b) to take measures which would be contrary to public order;
vs) to provide assistance if the other Contracting State has not taken all reasonable measures of recovery or conservation, as the case may be, which are available under its laws or administrative practice;
d) to provide assistance in cases where the resulting administrative burden for that State is clearly disproportionate to the advantages which may be derived therefrom by the other Contracting State.

ARTICLE 27 

MEMBERS OF DIPLOMATIC AND CONSULAR MISSIONS

1.The provisions of this Convention shall not affect the fiscal privileges enjoyed by members of diplomatic missions or consular posts, and members of permanent delegations to international organizations by virtue either of the general rules of international law or of the provisions of special agreements.

 

2.Notwithstanding the provisions of Article 4, any natural person who is a member of a diplomatic mission, a consular post or a permanent delegation of a Contracting State, located in the other Contracting State or in a third State , is considered, for the purposes of the Convention, as a resident of the sending State, on condition that he is subject in that sending State to the same obligations with regard to taxes on all his income or capital , as residents of that state.

 

3.The Convention does not apply to international organizations, their organs or officials, nor to persons who are members of a diplomatic mission, a consular post or a permanent delegation of a third State, when they are in the territory of a Contracting State and are not treated as residents in either Contracting State with regard to taxes on income or on capital.

 

ARTICLE 28 

REFUSAL TO GRANT CONVENTIONAL BENEFITS

Notwithstanding any other provision of the Agreement, an advantage hereunder will not be granted in respect of an item of income or capital if it can be reasonably concluded, having regard to all the facts and circumstances specific to the situation, that the granting of this advantage was one of the main objects of an arrangement or a transaction which made it possible, directly or indirectly, to obtain it, unless it is established that the granting of this benefit in these circumstances is consistent with the object and purpose of the relevant provisions of the Convention.

 

ARTICLE 29 

TERMS OF APPLICATION

1.The competent authorities of the Contracting States may jointly or separately regulate the mode of application of this Convention.

 

2.In particular, in order to obtain in a Contracting State the advantages provided for in Articles 10, 11 and 12, residents of the other Contracting State must, unless the competent authorities provide otherwise, present a form of residence certificate. indicating in particular the nature and the amount or value of the income concerned, and including the certification of the tax services of that other State.

 

ARTICLE 30 

ENTRY INTO FORCE

1.Each of the Contracting States shall notify the other of the completion of the procedures required with regard to it for the entry into force of this Convention. This comes into force on the date of receipt of the last of these notifications.

 

2.The provisions of the Convention apply:

To) With regard to France:

i) with regard to income taxes levied by withholding at source, to sums taxable after the calendar year in which the Convention entered into force;
ii) as regards taxes on income which are not levied by means of withholding at source, to income relating, as the case may be, to any calendar year or any financial year beginning after the calendar year during which the Convention is Coming into force ;
iii) as regards other taxes, to taxes the chargeable event of which will occur after the calendar year during which the Convention entered into force;
b) With regard to Luxembourg:

i) with regard to taxes withheld at source, to income attributed on or after January 1 of the calendar year immediately following the year in which the Convention enters into force;
ii) as regards other taxes on income and taxes on capital, to taxes due for any taxation year beginning on or after January 1 of the calendar year immediately following the year in which the Convention enters in force.

3.The provisions of the Convention between France and the Grand Duchy of Luxembourg for the avoidance of double taxation and establishing rules for mutual administrative assistance with respect to taxes on income and on capital signed in Paris on 1 st April 1958 cease to have effect from the date on which the provisions of this Convention first apply.

 

ARTICLE 31

 DENUNCIATION

1.This Convention shall remain in force without limitation of duration. However, each of the Contracting States may denounce it by giving notice through the diplomatic channel at least six months before the end of any calendar year.

 

2.In the event of denunciation, the Convention will no longer be applicable:

To) Regarding France:

i) with regard to income taxes levied by withholding at source, to sums taxable after the calendar year during which the denunciation has been notified;
ii) with regard to income taxes which are not levied by means of withholding at source, to the related income, as the case may be, to any calendar year or to any financial year beginning after the calendar year during which the denunciation will have been notified;
iii) with regard to other taxes, to charges for which the operative event will occur after the calendar year during which the termination has been notified.
b) Regarding Luxembourg:

i) with regard to taxes withheld at source, to income attributed on or after January 1 of the calendar year immediately following the year in which notice is given;
ii) as regards other taxes on income and taxes on capital, to taxes due for any taxation year beginning on or after January 1 of the calendar year immediately following the year in which the notice is given.

In witness whereof, the undersigned, being duly authorized thereto, have signed this Convention.

Done in Paris, on March 20, 2018, in duplicate in the French language.

 

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