UK/France Double Tax convention
The Double Taxation Convention between the UK and France has been updated. The changes are expected to take effect in the UK from 1 April 2010 in relation to corporation tax and from 6 April 2010 in relation to income tax and capital gains tax. The provisions will apply in France from 1 January 2010 assuming all relevant legislative procedures are completed in France before the end of this year.
The revised Convention was signed by the Chancellor of the Exchequer and his French counterpart last summer. The agreement has now been ratified in the UK and the Statutory instruments have been entered into law. HMRC have published an explanatory memorandum to be read in conjunction with the Statutory Instrument.
The new agreement replaces earlier agreements between the two countries and follows the approach set out in the OECD’sModel Tax Convention on Income and on Capital.
The agreement seeks to avoid double taxation in relation to income tax, corporation tax and capital gains tax in the UK and similar taxes in the French Republic including income tax, corporation tax, social contribution on corporation tax, tax on salaries and other “social” taxes.