On 20 March 2018, a new double tax treaty and an associated protocol (“New DTT”) were signed by the French and Luxembourg governments. The New DTT will replace the current double tax treaty (dated 1 April 1958) and it will enter into force at the earliest on 1 January 2019, after the completion of the ratification process by each State.
The text of the New DTT can be found in French. It takes into account the latest OECD standards reflected in the 2017 OECD Model Tax Convention. The main changes brought by the New DTT pertain to the persons covered, the definition of permanent establishment, the withholding tax rate on dividends paid by real estate investment funds, the taxation of employment income, and the method to be used by France to eliminate double taxation.
