LEXUNION Newsletter Nº3 – 3t 2015

We are glad to let you know that the third 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 3-2015

GERMANY_____________________________________

The German matrimonial regime modifies foreign succession law

The German Federal Court of Justice (BGH) judged in a ruling dated 13.05.2015 (IV ZB 30/14) that the « separatist » German regime of participation in property acquired after marriage, when it is applicable as a matrimonial regime, increases by 1/4 the surviving spouse’s share in the estate, even if this is determined according to a foreign succession law (Greek in this case). In itself, this decision definitively ends attempts by certain courts of appeal, which until then have qualified these provisions as coming under succession law, making them inapplicable in the presence of a foreign succession law. In this case, it concerns § 1371 of BGB which is intended to liquidate the matrimonial regime outright while increasing by 1/4 the surviving spouse’s share in the estate pursuant to the claim for sharing.

The entry into force of European regulation 650/2012 does not detract from the importance of this decision because there will continue to be, in future, cases where these two rights are not uniform. This would be, for example, the case of a German deceased person married to a German spouse (here, German matrimonial law is applicable, Art. 14, 15 EGBGB), but having had their last usual residence in a country other than Germany (therefore a foreign succession law would apply, Art. 21 of the regulation). Remember that Germany did not ratify the Hague Convention of 1978.

Foreign practitioners must therefore, in the presence of a foreign succession law and in case of liquidation of the estate in Germany, check that the succession rights of the surviving spouse are not increased by the phenomenon described above.

For more information, please contact the members of the Cabinet LAINÉ & Cie by email: info@avolegal.de

BELGIUM______________________________________

Real-estate gift tax

The three Belgian regions (Brussels capital, Flanders and Wallonia) have tax autonomy concerning registration duties, including real-estate gift tax.

Flanders has again made use of this competence to modify this tax, which was until now identical in the three regions. Real-estate gift tax has thus been reduced and simplified in the Flemish region.

  • In direct line

The marginal rate went from 30{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} to 27{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}. The number of gradual taxation bands has gone from 9 to 3 (as in succession law). As an example, a gift by a couple to their 2 children, of a building worth €600,000, would have been subject to gift tax of €42,500 according to the old regime and €18,000 according to the new rate.

  • Other rates

Previously, there were three other rates in matters of real-estate gifts (brother and sister, uncle and nephew, any other person) with ceilings from 65 to 80{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

They have been replaced by a single new « other persons » rate which only contains 4 bands and a marginal rate of 40{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}, representing a reduction by half for gifts between those who are unrelated. This again risks causing fiscal shopping-around within Belgium itself.

The region of Brussels Capital recently announced that it would set up new rates for real-estate gifts. This will probably be different from Flanders but will have the aim of reducing the said tax.

FRANCE_______________________________________

1.- Real-Estate capital gain: Elimination of the obligation to designate an accredited tax representative as guarantor of the calculation and payment of the real-estate capital gain for EU and EEA residents.

BOFIP NR-30-20: « For capital gains realised following sales occurring from 1 January 2015. The obligation to designate a tax representative does not apply when the seller is domiciled, established or incorporated in a member state of the European Union (EU) or in another State that belongs to the agreement on the European Economic Area (EEA) ».

2.- Non-residents: Income tax and social-security deductions of 15.5{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} on property capital gains

Summary table of the situation of non-residents with regard to property capital gains

Summary of tax rates on capital gains (IRPV) and social-security deductions (PS)

Affiliated to a social-security regime within the EEA (+ Switzerland), excluding France

Affiliated to the French social-security regime

Not affiliated to a social-security regime within the EEA + Switzerland

Tax residence in France

–    IRPV: rate of 19{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    French PS: 0{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} (upon request) and subject to providing evidence of affiliated regime in an EEA country or Switzerland on the day of the sale*

–    IRPV: rate of 19{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    French PS: 15.5{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    IRPV: rate of 19{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    French PS:? Indeterminate to date: therefore PS 15.5{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} and request for reimbursement, but uncertain

Tax residence within the EEA or outside the EEA (excluding the case of ETNC)

–    RPV: rate of 19{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    French PS: 0{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} (upon request) and subject to providing evidence of affiliated regime in an EEA country or Switzerland on the day of the sale*

–    IRPV: rate of 19{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    French PS: 15.5{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    IRPV: rate of 19{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099}

–    French PS:? Indeterminate to date: therefore PS 15.5{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} and request for reimbursement, but uncertain

* The deductions continue to be made and a request for reimbursement must be made while waiting for an evolution of the law or tax doctrine.

3.- French property income received by those affiliated to a social-security regime within the EEA (+ Switzerland), excluding France

Exemption from social-security deductions based on European Court of Justice and Council of State jurisprudence.

However, currently, deductions continue to be made and a request for reimbursement must be made while waiting for an evolution of the law or tax doctrine.

4.- Gifts and legacies to public organisations or organisations of public utility under foreign law

The amended Finance Act for 2014 extended the scope of application of the exemption to gifts and legacies granted to legal entities or organisations of the same nature as those benefiting from the exemption under French law, incorporated based on foreign law and for which the head office is located in a member state of the EU or the EEA.

France nevertheless makes the benefit of the exemption subject to approval delivered by the tax administration, the procedures for applying for this being listed according to the terms of a decree dated 17 April 2015 (n°2015/442).

The organisations under foreign law may henceforth make a request for approval which will be applicable for gifts and legacies granted to the organisation during a period of three years. The request may also be made at the time of a specific transaction if the organisation produces the substantiating documentation within the deadline for registering the declaration of succession, the gift or the official deed ascertaining the gift.

For any additional information, especially on complaints pursuant to social security deductions your client has paid, please contact the following people by phone (at 00.33 1 44 01 25 25) or by e-mail:
Pascale SANSEAU: pascale.sanseau.75237@paris.notaires.fr),
Bertrand SAVOURE: bertrand.savoure@paris.notaires.fr),
Pascal JULIEN SAINT-AMAND: pjsa@paris.notaires.fr

ITALY_________________________________________

Expropriation of goods which cannot be disposed of or freely be transferred, and acquisition of goods resulting from bankruptcy and subject to free-of-charge deeds

The Decree Law No. 83 of June 27, 2015 as amended by the Law No. 132 of August 6, 2015 within the perspective of the intensive simplification and acceleration of both ordinary and bankruptcy enforcement proceedings, has ordered the introduction of a new « automatic ineffectiveness » mechanism towards former creditors, of free-of-charge deeds and of the trusts and similar deeds that have been signed by the debtor.

Until last June 27, any debtor who was about to suffer an aggression of his assets from creditorshaving initiated any enforcement action on his assets, could easily affect the position of his creditors by freely selling his assets to a family member or to a trustee or, more simply, for the cost of the operation exlusive of tax, by constituting an earmarking on the same asset, which could suitably be opposed to the same creditor (earmarking, see art. 2645 ter of the Italian Civil Code, trust fund, trust).

As a matter of fact, the « institutional » remedy towards such debtor’s behaviour, constituted by the revocatory action (ordinary actioin or, depending on the case, bankruptcy), resulted as not being suitable, considering the crisis of the Italian civil justice, thus making the process timing realistic over ten years.

Instead, according to the new rules and their various legal requirements, the creditor was being allocated the executive title « may proceed…to execution, even if he had not previously obtained a judgment stating the ineffectiveness, if he had registered the seizure within one year from the deed registration date ». The heart of the rule is the following: to make it possible to track rapidly any executive actionstaken by the creditor, which was already the result at the time when the deed was drawn up, while eliminating the need for any preliminary judicial investigation on the ineffectiveness of the fraudulous free-of-charge deed to the same creditors.

The debtor, in this case, should protect himself within the executive action, promoting exception to suit his creditors.

THE NETHERLANDS______________________________

Marital property

When a couple is getting married in the Netherlands without prenuptial contract, the full community of property applies. This community of property automatically includes all assets and liabilities acquired by the spouses prior to or during marriage. Even inheritances and gifts become part of the community of property (unless otherwise determined in a will or deed of gift).

A legislative proposal is currently pending, which introduces a new law on matrimonial rights. The community of property would no longer apply to people who marry without prenuptial contract.

Spouses will have three matrimonial tyoes of property: each spouse shall retain his/her pre-marital property. Property which was acquired duringmarriage shall be part of the common property. Inheritances and gifts shall be added to personal property.

SPAIN_________________________________________

European inheritance taxation after 17/08/2015

The European Regulation 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession, which has been applicable since August 17, 2015, although it was published in the Official Journal of the European Union on July 27, 2012, implies changes for successions involving more than one Member State, but apart from other situations and circumstances which may be affected by the aforementioned European Regulation, this rule expressly excludes, for sovereignty reasons, any revenue matters or administrative matters of a public-law nature. Therefore, the European Regulation provides as follows:

“It should then belong to the national law to determine, for instance, how taxes and other liabilities of a public-law nature are calculated and paid, whether these taxes are payable by the deceased at the time of death or any type of succession-related tax are to be paid by the estate or by the beneficiaries. It should also belong go the national law to determine whether the release of succession property to beneficiaries under this Regulation or the recgistration of property from succession may be subject to the payment of taxes.”

In this sense, the Spanish Inheritance and Donation Tax imposes a personal obligation to the « taxpayers who are usually residçing n Spain (according to the Income Tax for Individuals rules) shall be “requested to pay the said tax as a personal obligation, regardless of the location of the assets or rights which are part of the increase of the taxed heritage. »

The same tax is levied on real obligation to non-residents « for the acquisition of any goods and rights, being located, exercised or fulfilled on the Spanish territory, as well as on any perception of amounts from life-insurance contracts when the contract was signed with Spanish insurance companies or was held in Spain by foreign insurance commercial companies in Spain.

Meanwhile, the Spanish Law 22/2009, which approves the regulation of the financing system for the Autonomous Communities, determines that the yield of the inheritance tax is considered as being produced in the Autonomous Community territory where the originator has been living for the longest period of time immediately preceding five years, counted from date to date, and ending on the day of his death (accrual basis).

Therefore the European Regulation 650/2012 should not affect nheritance taxation. We may remember that on December 15, 2011 the European Commission published a recommendation which sets a number of measures, the purpose of which was to avoid, or at least, to moderate double taxation on successions.

In the aforementioned European Regulation, it is assumed that no comprehensive coordination of tax authorities can be achieved to fully avoid international double taxation. Therefore it raises tax relief based solutions. It also takes into consideration the various cases of double taxation thatmay arise, and it suggests to expand the use of agreements to avoid double taxation in the field of successions and donations, which is certainly underdeveloped.

However, as it is known, any recommendation is a dispositive act and as such is not binding on the Member States. Therefore, ultimately, setting any recommendation depends on the willingness of each Member State to implement the proposed measures.

So far, Spain has only signed inheritance related double taxation agreements with Greece, France and Sweden. Thus forany other countries, we recommend a previous analysis of each region by legal experts to optimize the results of any taxation.

SWITZERLAND__________________________________

THE END OF BEARER SHARES?

At the international level, Switzerland and its legal order are coming under strong pressure, particularly from the Financial Action Task Force. This pressure has borne fruit because joint stock company law underwent a « small revolution » on 1 July 2015.

Until that date, there were two types of shares, registered shares and bearer shares. In this last case, it was quite possible that the company itself did not know who its shareholders were.

This possibility of holding shares anonymously did not please the FATF, which has achieved its objective: admittedly, bearer shares still exist, but since 1 July last, the holders of such securities must make themselves known to the company, which is required to list them. Anyone who does not declare themselves loses their corporate and economic rights!

This measure is accompanied by a second one which should also favour transparency: persons who alone or combined hold at least 25{5a123fd2ff0edecec35de014470138a8d457280103a9b9810af819076914f099} of the votes or capital of a joint stock company (SA) or a limited company (SARL) are required to declare the economic beneficiary of the shares.