Double Taxation Agreement With France

Surveillance activities carried out in the other State for more than six months in connection with a construction, installation or assembly project carried out in that other State constitute an MOU. France is the main gateway to the European Union (EU), a single market of 500 million consumers with high purchasing power. Strategically located in the heart of Europe, France is a springboard to neighbouring Europe, the Middle East and Africa. France is Europe`s second-largest economy and the region`s second most popular destination for foreign financial firms. Its role in the region is reinforced by Paris, one of the largest asset management centers in the world. The EU is the world`s largest recipient of foreign investment and holds a significant share of investment from emerging countries. In 2011, France`s total cumulative FDI inflow was $963.8 billion, ranking fourth in the world after the United States, China and the United Kingdom. In this category, it is also the agreement that provides for the principle of taxation. In the absence of an agreement, the income from assets is taxable in France.

The agreements provide in principle for the taxation of real estate income from immovable property located abroad in the country where the property is located. Income is exempt from tax in France, but must be reported according to the effective tax rate method for the taxation of income from French sources. However, some conventions provide for the taxation of such income in France and the elimination of double taxation by the application of a tax credit generally equivalent to French tax. Capital gains: the agreements provide for three types of capital gains: interest paid in one Contracting State to a State established in the other Contracting State may be taxed in that other State. However, such interest may also be taxed in the Contracting State in which it is received if the recipient is the beneficial owner of the interest. The tax thus collected must not exceed 10% of the gross amount. The Government of a Contracting State and certain public entities shall be exempt from tax in the other State Party in respect of interest arising in that other State. Interest paid in a State Party on loans and bonds to an enterprise operating in that State to an enterprise established in another Contracting State shall be exempt from the tax of that first-mentioned Contracting State.

These enterprises must be approved by the competent authority and the industrial enterprise includes manufacturing, assembly, processing, construction and civil engineering, shipbuilding, breaking & water supply, energy and water supply, mining and mining, plantations, agriculture, fishing and forestry and other enterprises declared industrial enterprises. . . .

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