Inheritance tax in France
In France , inheritance tax is levied on an acquisition due to death and gift tax is levied on a gratuitous gift between the living. The legal basis is the General Tax Code ( Code Général des Impôts , abbreviated CGI).
Personal and spatial scope
The tax applies to inheritance or gifts involving the testator, donor or purchaser who have their general tax residence in France. This applies to those who have their domicile or place of residence there, who pursue their main occupation or who have the focus of their economic interests. This also applies if an acquirer had his main tax residence in France for at least six years during the ten years prior to the acquisition. Assets outside France are also recorded.
In the absence of general tax liability , the law only applies to property located in France. In the case of securities and similar claims, unlike German law, taxation is based on the debtor's place of residence.
Estate valuation
The net acquisition of the accrued assets is taxed. Properties are generally valued at market value ( valeur vénale ). If the property was the main residence of the testator and will be inhabited by one of the testator's children in the future, a 20% discount is granted. The household effects are credited at a flat rate of 5% of the discount value, whereby a lower value can be proven. In principle, only those debts of the estate are deductible that have shown themselves to be burdensome for the testator at the time of the inheritance. Therefore, claims whose due date is more than three months in the past can no longer be deducted (whereby the assumption of a missing current debit can be refuted).
Partial tax exemptions for company succession
The transfer of sole proprietorship or a one-man company or goods serving these companies can be exempt from tax at 75% of their value if the business was owned by the testator for at least two years and the acquirers undertake to keep the business running for at least to continue for three years and to keep the inherited objects serving the company for at least four years. Other company holdings can also be exempt from tax at 75% of their value if they were owned by the testator for at least two years before the inheritance and the testator obliges the heirs to hold the participation for at least four years after the acquisition. At least one of the heirs must have had his or her own full-time business activity in the company for at least three years. The testator must hold a stake of at least 34% in the company, in the case of listed companies with at least 20%, and another (non-inheriting) shareholder must also submit to the binding obligation.
Tax brackets and allowances for purchases up to August 17, 2012
- Spouses and life partners , i.e. persons who are connected to the testator or donor through a Pacte Civil de Solidarité (PACS) , were exempt from inheritance and gift tax from August 21, 2008.
- Relatives in a straight line were able to use an allowance of 156,359 euros.
- Siblings received an allowance of 15,636 euros. They were completely exempt from inheritance tax if they had lived together with the deceased for at least five years before his death and were either over 50 years old or unable to work.
- Nephews and nieces received an allowance of 7,818 euros.
- Disabled and incapable of work received an allowance of 156,359 euros.
- Other buyers were able to use an allowance of 1,520 euros.
The personal allowances for the tax class of the relatives in a straight line are indexed according to the development of the upper limit for income tax.
Tax brackets and allowances for purchases from August 17, 2012
On July 19, 2012, the French Parliament approved the following changes to inheritance taxation for acquisitions from August 17, 2012:
- Reduction of the inheritance tax exemption for relatives of the direct line (descendants, ascendants) from 159,000 euros to 100,000 euros per child. The exemptions are now only due every 15 years (previously 10 years).
Tax rates
The tax rates can be found in the two tables below.
| Assets according to the exemption | Tax rate in% |
|---|---|
| up to € 8,072 | 5% |
| € 8,073 - € 15,932 | 10% |
| € 15,933 - € 31,865 | 15% |
| € 31,866 - € 552,324 | 20% |
| € 552,325 - € 902,838 | 30% |
| € 902,839 - € 1,805,677 | 40% |
| more than € 1,805,677 | 45% |
The following tax rates apply to the other tax classes:
| Tax class | Assets according to the exemption | Tax rate in% |
|---|---|---|
| siblings | up to € 24,430 | 35% |
| siblings | over € 24,430 | 45% |
| Relatives up to the 4th grade | Net worth | 55% |
| Other acquirers | Net worth | 60% |
International tax law and double taxation treaties
To avoid double taxation on inheritance taxes, France has concluded double taxation agreements with several countries , including with Austria and Switzerland. Since January 1, 2015, there is no longer a bilateral inheritance tax agreement between Switzerland and France. Both states now apply their own tax law in this regard. France avoids double taxation in most cases by deducting the taxes paid in Switzerland. However, there are exceptions where double taxation cannot be avoided. These include, for example, stakes in French companies that a testator resident in Switzerland leaves to an heir resident in France.
A double taxation agreement concluded with Germany in the field of inheritance and gift tax on October 12, 2006 was ratified on April 2, 2009 and thus came into force. Double taxation is usually avoided through crediting.
See also
literature
- Troll-Gebel-Jülicher: Inheritance Tax and Gift Tax Act , loose-leaf commentary, 37th edition 2009, Vahlen, ISBN 978-3-8006-2402-7 , § 21 ErbStG marginal no. 100.
Individual evidence
- ↑ Art. 787 B CGI
- ↑ Legifrance, page of the French government, loaded January 11, 2010, Art. 779 Code génerale des impôts (French)
- ↑ Quoted from Jan-Hendrik frank: French inheritance tax .
- ↑ Quoted from Service Public: [1] .
- ↑ Quoted from Service Public: [2] .
- ↑ Archive link ( Memento of the original from March 4, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.
- ^ Franco-German DTA in matters of inheritance and gift tax
- ^ Message from the German embassy in Paris v. April 6, 2009
- ↑ Quoted from Jan-Hendrik frank: The taxation of German-French inheritance according to the double taxation agreement .
