UK-France double tax treaty (July 2011) - financial news article

UK-France double tax treaty (July 2011)

An increasing amount of confusion has been surrounding the question of the date of implementation of the Double Tax Treaty between France and the UK, and that it commenced in commenced in 2010 and not 2011.

We have a different opinion, confiming 2011, which is substantiated by the following :

According to the the French Code Civil, article 1, French law has to be published in the Journal Officiel before it can become effective.  CLICK

The same article 1 of this Code Civil also confirms that unless a specific date is mentioned as to when the law comes into effect, it comes into effect the day following the date of publication. CLICK

The French Decree ordering publication of the new Double Tax Treaty was dated the 7th January 2010, and the law was published in the Journal Officiel on the 9th January 2010. CLICK

The Treaty states in article 31.1 that it comes into force once the procedures required by the French government have been completed.  Furthermore, a law cannot be effective unless the people have been informed of it, which the French do through publication in the Journal Officiel.  These procedures were therefore completed by the publication in the Journal Officiel. CLICK

Furthermore, the January Decree requesting this publication refers to, as one of its justifications or provenances, the law of December 2009 (Loi 2009-1470) which approved the Treaty.  Other than the fact that this latter law is no more more than an appoval, since the January Decree is based on it, the January Decree cannot be anything else other than a continuation of the procedure to legislate, meaning that the completion of the procedures referred to in article 31 was not until 2010.

As the law comes into force the day after publication in the Journal Officiel, the Double Tax Treaty law came into effect in France on the 10th January 2010.

Article 31.1 of the Double Tax Treaty states that the date of entry into force of the provisions of the Treaty shall be the latter of the dates that the two countries have terminated their procedures for bringing the law into force.  This confirms the date of 10th January since this is the latter date that the two countries finished their procedures, the UK having finished theirs on the 18th december 2009.

Article 31.2.b, and sub articles (i), (ii) and (iii) of the Double Tax Treaty all state that the date from which income is assessed under the terms of the Treaty is from the beginning of the following calendar year to that when when the Treaty came into force.  As the Treaty came into force in 2010 this is then the 1st January 2011. CLICK