France: Implications of BEPS multilateral convention - KPMG Global
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France: Implications of BEPS multilateral convention for tax treaty-related measures

France: Implications of BEPS multilateral convention

The official ceremony for the signing of the multilateral convention to implement tax treaty measures to prevent BEPS (the “multilateral instrument” or MLI) took place on 7 June 2017 in Paris. France was one of 67 countries signatories (representing 68 jurisdictions), being noted that eight other jurisdictions have expressed their intention to sign the MLI.


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At the time of signing or, at the latest, when the instrument of ratification is deposited, each signatory country must provide the OECD with a list of the bilateral treaties modified by the multilateral instrument as well as the list of options and reservations made with respect to the various provisions of the convention.


Regarding France, 88 tax treaties are covered (out of a total of 125 treaties) by the MLI, including those concluded with major business partners—e.g., Germany, the Netherlands and the United Kingdom. As did several other countries, France also included the treaty concluded with the United States even though the United States was not expected to sign the MLI.

The statements made by France, to date, reveal that:

  • The following proposals on permanent establishments have been adopted:
    • Dependent agent PE rule
    • Choice of Option B as regards the specific activity exemption
    • Anti-fragmentation rule
    • “Splitting of contracts” rule
  • A reservation has been made to the provisions on hybrid entities (Article 3 of the MLI) considering French specificities on tax-translucent companies.
  • The “principal purpose test” has been adopted (as also by the majority of the MLI signatories). France did not opt for an additional simplified limitation on benefits (LOB) test.
  • France agreed to the mandatory binding arbitration mechanism (like 24 other signatories)

These positions taken by France are expected to be confirmed at the time of depositing the instrument ratifying the MLI.


For more information, contact a tax professional at FIDAL* in Paris or the French KPMG Tax center in New York:

Patrick Seroin | +1 (212) 954-2523 |

Nathalie Cordier-Deltour | +33 (0)1 55 68 14 54 |

*FIDAL is a French law firm that is independent from KPMG and its member firms.

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