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Swiss Federal Council To Renegotiate French IHT Deal

by Lorys Charalambous, Lowtax.net, Cyprus
20 February, 2014

The Committee for Economic Affairs and Taxation (CEAT) of the Swiss Council of States has unanimously agreed to return to the Federal Council for renegotiation the bilateral agreement concluded with France, aimed at preventing double taxation with respect to inheritance tax (IHT).

The CEAT committee has specifically tasked the Government with renegotiating the deal within the framework of a "structured dialogue."

Defending its decision, the committee emphasized its criticism of the new agreement. In contrast to the existing accord, concluded in 1953, the provisions heavily penalize French citizens inheriting Swiss assets, as well as Swiss citizens resident in France, the body argued.

However, the committee is all too aware that a non-consideration of the matter by the Council of States would lead to a definitive rejection of the brokered agreement, and to France "denouncing" the deal currently in force.

Given that a treaty vacuum would compromise the legal security of the citizens concerned, the committee therefore urged the Federal Council to re-launch talks with France to resolve the issue, based on the principle that France, too, has an interest in resolving the matter satisfactorily to prevent double taxation.

The new Franco-Swiss inheritance tax deal enables the French Government to tax heirs and beneficiaries of Swiss citizens resident in France. This is after the deduction of any inheritance tax due in Switzerland, and on condition that heirs and beneficiaries have been resident in France for at least eight out of ten years prior to the period of receipt.

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