FRANCE Law and Practice Contributed by: Anthony Roustan and Cédric Dubucq, Bruzzo Dubucq
1. Sources and Principles 1.1 Domestic Sources of International Tax Law Domestic Legislation The principal source of French international tax law is the Code général des impôts (General Tax Code; CGI), supplemented by its regulatory annexes and the Livre des procédures fiscales (Book of Tax Pro - cedures; LPF). Key provisions address tax residence, non-resident taxation, the corporate territorial princi - ple, transfer pricing and anti-avoidance rules. The definition of a resident in domestic French law is found in Article 4 B of the CGI. Administrative Guidance The Bulletin Officiel des Finances Publiques (Official Bulletin of Public Finances; BOFiP) provides a binding administrative doctrine that taxpayers may rely upon. This includes specific guidance on treaty interpreta - tion and international reporting obligations. The BOFiP is binding on the tax authorities. Case Law The French Supreme Court ( Conseil d’État ) plays a decisive role through rulings on treaty interpretation, beneficial ownership and anti-abuse provisions. It often relies on the OECD Model Commentary as a supplementary interpretative tool. Treaty Network France has over 120 bilateral tax conventions in force, generally following the OECD Model Convention. The treaty network covers all major trading partners and typically addresses elimination of double taxation, allocation of taxing rights and exchange of informa - tion.
Hierarchy The hierarchy of sources is as follows: • constitutional provisions sit at the apex; • EU law enjoys primacy over national law; • tax treaties rank below EU law but above domestic statutes; • domestic legislation applies to the extent that it does not conflict with treaties; and • administrative doctrine (BOFiP) binds the tax authorities but not the courts. Practical Implications In practice, the Administrative Courts first apply domestic French law and then check whether a treaty provision prevents or limits the application of domes - tic law. In France, the principle is that a treaty can only reduce the taxation power of the contracting state, and can - not create a new right to tax that is not provided by domestic law. Taxpayers frequently invoke treaty provisions to over - ride less favourable domestic rules, particularly to reduce withholding tax rates on cross-border pay - ments. Courts apply the Vienna Convention on the Law of Treaties principles and may depart from admin - istrative doctrine where it conflicts with the treaty text. 1.3 OECD Model/United Nations Influence on Treaty Practice General Alignment France’s treaty practice is firmly rooted in the OECD Model Convention, reflecting its role as a founding OECD member. Most French treaties closely follow the OECD Model structure in their allocation of taxing rights and dispute resolution mechanisms. Key Deviations Notable deviations from the OECD Model include: • a broader definition of royalties that often includes payments for industrial, commercial or scientific equipment; • reliance on the credit method rather than the exemption method for double taxation elimination,
1.2 Hierarchy of Sources Constitutional Framework
Under Article 55 of the Constitution, duly ratified tax treaties hold supra-legislative rank, prevailing over conflicting domestic legislation. This principle has been consistently upheld since the Supreme Court’s Nicolo decision (1989).
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