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The French Council of State has definitively resolved the question of the tax rate applicable to real estate capital gains made in France by taxpayers having their tax domicile in Switzerland.
End of dispossession In a judgment dated November 20, 2013, it finally considered that the appeal of the Minister of the Budget for the purposes of applying the rate of 33.1/3% was unfounded: Swiss residents would have had to be subject to the rate of 19% in terms of real estate capital gains .
The Higher Administrative Court excluded the 33.1/3% tax by making the non-discrimination clause prevail. It argues that article 244 bis A of the general tax code provides for an exceptional tax at the rate of 19% which must also apply to nationals and residents of a state outside the EU and EEA by virtue of the application of the non-discrimination contained in the Franco-Swiss convention in its article 26 paragraph 1: “The nationals of a Contracting State are not subject in the other Contracting State to any taxation or obligation relating thereto, which is other or more onerous than that to which nationals of that other State who are in the same situation are or may be subject. This decision of the Council of State confirmed consistent case law of the Administrative Court of Appeal of Versailles. From now on, the French administration will be forced to respect the position of the Council of State. A tax rate of 19% will thus be applied for the final levy, regarding real estate capital gains.sales .
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Regarding capital gains made before the decision of the Council of State, Swiss taxpayers can request a tax relief of 19% within the action period. This deadline is two years from payment of the contested tax, which directly targets taxpayers who have paid tax on real estate capital gains since January 2012, at the time of writing. Far. Law No. 2013-1117 of December 6, 2013 relating to tax fraud and serious economic and financial delinquency also took note of this state of law in article L190 of the book of tax procedures. These taxpayers can therefore legitimately request relief, allowing them to recover significant sums.
The procedure was therefore long, uncertain and expensive, which deterred many people. Now, the administration’s argument is undermined by the recent decision of the Council of State. There is no more danger. Today, the call for help has become certain, inexpensive and very quick! Despite everything, it is clear that the French tax authorities have been winning the jackpot among Swiss residents for many years. For this not to be a PYRRHUS victory, taxpayers must mobilize massively. We call for this mobilization, so that beyond principles, Swiss residents are the real winners of this battle.
The author: Serving an international clientele, Maître Grégory DAMY, a French lawyer, is of Swiss origin. Particularly sensitive to the cause of the Swiss, he fought for many years against this discrimination.
Doctor of Law
Associated with the Bar