ENDE
Announcement

France: Additional documentation for the application of the Double Taxation Treaties benefits

Tax | France

Reference

Code
A17002
Service level
CBL
Last Updated
05.01.2017

TAX HELP DESK LUXEMBOURG

E:

tax@clearstream.com

T:

+352-243-3 2835

F:

+352-243-63 2835

Following recent clarifications from the French Tax Authorities (FTA), Clearstream Banking1 wishes to inform customers that specific additional documentation is required from certain final beneficial owners in order to benefit from the Double Taxation Treaty (DTT) rates. This concerns specifically the beneficial owners being U.S. Regulated Investment Companies (RIC), Real Estate Investment Trusts (REIT) or Real Estate Mortgage Investment Conduits (REMIC) and certain entities for which the taxability is not well defined by the status.

Background

According to Article 4 of the DTT between France and the United States of America, RIC, REIT and REMIC can benefit from a 15% reduced tax rate on French-sourced dividends on the condition that they provide an Internal Revenue Service (IRS) Form confirming the status of the U.S. entity. However, the IRS only deliver attestations 6166 which do not refer to the RIC, REIT or REMIC status, leading to rejections of the DTT applications by the FTA. Our French local depository entered into discussions with the FTA in order to find a solution that would suit all parties.

For certain non-U.S. entities, as per older clarifications from the FTA (refer to our announcement A14075, dated 27 May 2014) there is a need for a specific tax attestation in order to prove the taxability of the entity claiming the benefits of a DTT. The wording of these attestations has now been clarified by the FTA.

Impact on customers

Following these clarifications, customers wishing to obtain DTT rates through the simplified procedure or the standard refund are required to provide the following documentation according to their status:

  • U.S residents being either RIC, REIT or REMIC must provide in addition to the usual set of documentation, as described in our Market Taxation Guide - France, a copy of the Form 8802 (application for United States Residency Certification), completed, dated and signed by the U.S. RIC, REIT or REMIC and valid for the year. It has to clearly indicate in section 5 that the applicant is required to file a U.S. tax form 1120-RIC (for U.S. RIC) or a U.S. tax form 1120-REIT (for U.S. REIT) or a U.S. tax form 1066 (for U.S. REMIC). The form 8802 must indicate the same name and tax identification number as the ones indicated on the Form 6166.
  • Non-US residents, mainly Investment schemes (SICAVs, FCPs, CIVs, OPCVM/UCITS etc.) are required to provide a tax attestation in addition to the usual set of documentation, as described in our Market Taxation Guide - France, and must ensure that their tax attestation is duly certified, signed, dated and printed on local tax authorities’ letter head and includes one of the following wordings officially accepted by the FTA:
    • The beneficial owner is subject to tax on its worldwide income;
    • The beneficial owner is subject to tax including on its French income;
    • The beneficial owner is liable to tax without being exempted on its worldwide income; or
    • The beneficial owner is liable to tax without being exempted including on its French income.

No official template of the tax attestation exists, customers must provide the one that is published under the Tax forms to use – France page that includes the wording “is subject to tax at a normal rate on its income (including French Income)” and is accepted by both our depository and the FTA.

Further information

Customers may contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking Frankfurt (CBF) customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.