Newsletter Lexunion Nº14 – 2T 2018

Newsletter Lexunion Nº14 – 2T 2018


We are glad to let you know that the 14th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter client – Lexunion 14-2018_EN-FRr


1.- Succession

In matters relating to certificates of succession, national jurisdiction is now determined solely by EU Succession Regulation no. 650/2012. Such was the ruling of the Court of Justice of the European Union (ECJ) in its order of 21.06.2018 (C-20/17 – Oberle). In this case, the deceased, a French national, had been the owner of property located in Germany and France. Upon his death, his son asked a court of first instance in Berlin to draw up a certificate of succession for the property in Germany. The court declared its lack of jurisdiction based on Articles 4 and 15 of the aforesaid Regulation. Following an appeal, the court of appeal sought a preliminary ruling from the ECJ to determine whether the jurisdiction provided for by the Regulation also applied to national succession certificates. The ECJ answered in the affirmative: international jurisdiction on succession, including certificates of succession, is governed uniformly by EU Regulation no. 650/2012. The latter stipulates that the jurisdiction of the country of last habitual residence is competent to rule on his entire estate. Therefore, French courts alone had competence to draw up the certificate of succession.

The Regulation does not apply in Switzerland since it is not a signatory. As a result, when a Swiss national having fixed property in Germany dies in Switzerland, the German authorities will continue to demand the production of a certificate of succession issued by German courts in order to settle the part of the estate relating to property in Germany even though Swiss law is applicable to the succession.


2.- Taxation

  • Treatment of French-source dividends

Reacting to two fiscal court judgments (Cologne of 31.08.2016 and Munich of 13.03.2017), the German tax authority published its decision to amend as from 2018 the taxation of French-source dividends received by German shareholders owning a stake of more than 10%, in a circular dated 13.03.2018, as from 2018. From now on, the rule of § 8b para. 5 KStG (Corporate Tax Act) providing for the total exemption of dividends from tax except for a 5% share of costs and charges will apply to French-source dividends whilst, due to its interpretation of Art. 20, para. 1 of the Franco-German Tax Agreement, this 5% sharewas only included previously when the actual costs and charges exceeded 5% (OFD NRW [Regional Tax Office North Rhine-Westphalia], 13.03.2018 – S 2750a-2014/0001-St 131).


  • Instruction of 20.04.2018

The German tax authority published an instruction dated 20.04.2018 in which it fixes the administrative principles applicable to the matter of determining whether a transaction carried out between a shareholder and the company can qualify as a gift and is, therefore, subject to the gift taxation system. In particular, it specifies that a 50% shareholder who transfers assets to the company without receiving the full consideration therefore does so by making a – taxable – gift to their co-shareholder (see Instruction no. 3). Likewise, a shareholder leaving the company and waiving full or partial payment of an indemnity does so by making a – taxable – gift to their co-shareholders – (see Instruction no. 2.5).



Within the framework of a revision of Swiss Company Law, the Swiss National Council (that is, one of the two Parliamentary chambers at Federal level) intends to introduce quotas for women of at least 30% on Boards of Directors and 20% in company management. However, nothing has been done so far as the Council of States still has to pronounce on the issue.

Following the resounding rejection of company taxation and old-age pension reforms, during referendums, the Council of State wishes to push the idea of a draft agreement that combines the two issues. It simply needs to convince the National Council and the Swiss people of the merits of this idea, in the knowledge that many political and economic players have already expressed their condemnation of such an agreement.■

Newsletter Lexunion Nº13 – 1T 2018

Newsletter Lexunion Nº13 – 1T 2018


We are glad to let you know that the 13th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter client – Lexunion 13-2018_en-fr


Deduction at source on dividends distributed to a non resident company

The European Court of Justice (ECJ) held in a decision of 20 December 2017 (C-504/16, C-613/16, Juhler Holding) that the2007-2012 version of the provisions of Article. 50d al. 3 EStG (German Income tax Act) was contrary to European law (parent company-subsidiary directive, freedom of establishment).

Said article governs the conditions of the reimbursement of the deduction at source in the event of a distribution of dividends to a non resident company. Under said provisions, said reimbursement provided for by the parent company – subsidiary directive was refused where(1st condition) it would have been refused if the shareholders of the parent company had been direct shareholders of the German subsidiaryand (2ndcondition) when one of the three following alternative conditions is met: (1) the foreign parent companycannot prove economic or other grounds for its interposition between its own shareholders and the German subsidiary; (2) the parent company’sown economic activity is not significant; (3) the parent company doesnot have a commercial organisation which allows it to achieve its company objects (number of employees, etc.).

In consequence, the ECJ dismissed theGerman Federal Central Tax Office (Bundeszentralamt für Steuern or BZSt) which refused to reimburse the deduction at source to a foreign company. Admittedly, said provision has been amended again since then, but there is still doubt on the legality of the current version and the Cologne Fiscal Court (Finanzgericht) has referred to the Court a preliminary question on said issue.


ITALY_______________________________________________________________________________1/ Advance dispositions of treatment

Article. 4 of the law December 22nd, 2017, no. 219 “Rules on informed consent and advance dispositions of treatment” – entered into force on January 31st, 2018 – allows subjects of age and capable of understanding and willing, in anticipation of a possible future inability to self-determine, to entrust a document containing advance provisions on health treatment, after having taken adequate medical information on the consequences of the choices made.

The deed containing the advance dispositions of treatment can have the form of a public deed or of an authenticated private agreement.

As for the tax aspects, pursuant to paragraph 6 of the art. 4, advance dispositions of treatment, even if drafted by public deed or authenticated private agreement, are not subject to registration obligation. They are also exempt from stamp duty and any other taxes and duties.

2/ Cancellation of the deed of incorporation of a joint-stock company

The Judge of the Register at the Court of Milan approached the issue of cancellation from the Companies Register of the deed of incorporation of a joint-stock company in which appears, as a single member, an attorney with a power of attorney then revealed to be false.

The Judge of the Companies Register can not order to cancel from the Companies Register a single member joint-stock company incorporated by a subject who later turned out to be a false attorney (falsus procurator).



Spanish Tax Authority is pressing hard over tourist renting platforms as AirBnB, Wimdu, Homeaway or Niumb.

Before next October 31st 2018, all those type of companies must inform the Spanish Tax Authority about all the transactions executed every quarter through their platforms, related to Spanish flats and indicating the name and identification of their clients renting homes in Spanish territory.

That obligation will be mandatory from next July 2018, so they will start informing about transactions made over the first quarter in 2018.

Real estate brokers, on the other hand, will have to include in their forms the identification of the building, its ID number, the number of days in which it has been rented for tourists, and the price received by the owner.

Newsletter Lexunion Nº12 – 4T 2017

Newsletter Lexunion Nº12 – 4T 2017


We are glad to let you know that the 12th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter client – Lexunion 12-2017_en-fr


A) Main changes arising from the Finance Law for 2018

  1. Reduction in the rate of corporation tax

Corporation tax will gradually go from 33.3% to 25% by 2022.

  1. The wealth tax will be replaced by the property wealth tax

The wealth tax is abolished and replaced by the property wealth tax. The taxation threshold (€1.3 million) and the rates remain identical but the tax base is modified because the property wealth tax is now only based on property assets held directly and indirectly.

Note that anti-abuse measures have been taken, notably concerning the deductibility of loans.

These measures are therefore likely to affect plans put in place for non-residents.

  1. Flat tax on income from capital

A flat tax is put in place at a rate of 30% on property income (interest, dividends and property capital gains) representing 12.8% income tax and 17.2% social-security deductions, from 1 January 2018.

The rate of taxation applicable to non-resident natural persons will depend, concerning the income tax, on any provisions of a tax agreement.

Property income and real-estate capital gains are not concerned by this flat tax.

B) Jurisprudence in international law

  • Reserved share of estates and public policy

The Court of Cassation, by two rulings dated 27 September 2017, judged that a foreign law ignoring the reserved share of estates is not, in itself, contrary to French international public policy.

The international public policy exception could, however, apply in the case where the persons entitled to a reserved share are in a situation of economic insecurity or need.

  • Taxation and abuse of rights

Abuse of right may be constituted by the application of the provision of an international agreement.

By decision dated 25 October 2017, the Council of State ruled abusive the interposition of a company whose existence was justified by the sole aim of avoiding tax through the application of a tax agreement.


Dedicated bank account for tax payments

The law 4 August 2017, n° 124, published in GazzettaUfficiale No. 189 of August 14th, 2017 (annual market and competition law), by changing the discipline referred to in paragraphs 63 et seq of the law December 27th, 2014, no. 147, made it mandatory for notaries to have a management capable of ensuring transparency and traceability of some of the sums received and anticipated by different ways.

In particular, the notary has to pay on a special dedicated bank account “all sums due by way of charges for which the same notary is withholding agent”. He must also “pass” on this dedicated bank account, “However the prepaid expenses referred to in art. 15, paragraph 1, no. 3)”of Presidential decree no. 633/1972, are excluded from the calculation of the taxable amount for VAT purposes.

Art. 1, paragraph 65 of the law December 27th, 2013, no. 147 provides in particular that “The sums deposited in the bank account, referred to in paragraph 63, constitute separate property. Those sums are excluded from the succession of the notary or other public official and from his matrimonial property of the family and exempt from foreclosure by anyone and also the credit to the payment or to the payback of the same is free from foreclosure.”

The legislation does not expressly provide for the obligation for the notary, to have, in addition to the dedicated bank account, at least anotherbank account at the same bank or at another financial institution.

However it is considered improper to manage financial transactions by using a single bank account on which any amount is brought.

The notary then must have at least two bank accounts:

– a “dedicated account”, to record the transactions of the received sums (or anticipated) “in relation to the deeds received or authenticated by the notary and subject to real estate or commercial publicity”;

– a “free” account that can be used for other purposes (fees, VAT, personal expenses and expenses for the office, etc.).

The forecast of paragraph 63 is very wide where it expressly states that on the dedicated bank account must be paid the amounts owed for taxes for which the notary is withholding agent and the expenses excluded from the calculation of the taxable base according to art. 15, paragraph 1, no. 3) of Presidential decree no. 633/1972. However, the traceability concerns only the amounts received (or anticipated) “in relation to the deeds received or authenticated by the notary and subject to real estate or commercial publicity.”

On said bank account must be paid all charges levied by the notary in connection with the so-called execution (such as stamp duties, land and mortgage taxes, etc.), advances excluded from VAT according to art. 15 and any other sums entrusted to the notary “and subject to entry in the register of the amounts and values of which at law January 22nd, 1934, no. 64”.

The notary is obliged to maintain appropriate documentation of the specific uses of the amounts deposited in the dedicated bank account and subsequently used.

This shall be without prejudice to art. 3 of Ministerial Decree of 31 October 1974, which provides for the possibility for operators in the notarial profession to postpone the issuance of the invoice within 60 days of thereceipt of the amount from the customer.



New rules on companies’ restructuring in Andorra

Andorra has established a special tax regime for merger and acquisitions operations for companies settled in that country.

It also includes operations of non-proportional splits and of assets return, aiming to ease the resolution of conflicts in Andorran business, especially among family offices. Thus, those rules make restructuring of family holdings a tax-free operation.

Nevertheless, Andorra wants to avoid using those rules just for tax reasons, so a valid economic reason is necessary in order to benefit from those tax exemptions.

Tax benefits in those operations include not only Corporation Tax, Personal Income Tax on its shareholders, and Non-residents Income Tax, but also every other tax or duty to be paid because of that restructuring.

The procedure used for those benefits is tax deferral, to avoid taxing the amounts accrued due to restructuring purposes, only in those cases where any Andorran tax was due.

This tax regime is fully aligned with the European Directive 2009/133/CE on the common regime applicable to mergers and acquisitions in the European Union, so it should not be difficult to implement for those notaries and lawyers working in the EU with any relationship with Andorra, France or Spain.