CGT in France - Fiscal Representation Obligation to be abolished

CGT in France - Fiscal Representation Obligation to be abolished

The French Government is dealing with a lot of changes on capital gains tax due from foreign sellers in France. The obligation to appoint a tax agent is to be abolished for all sales that take place from January 1st 2015.

In 2011, the European Court of Justice ruled that the requirement to appoint a tax agent was discriminatory and against the free movement of capital in Europe. It has taken the Sarkozy and Hollande governments 4 years to react!

Previously a French fiscal representative had to be appointed by non-residents selling a French property for more than € 150.000, even if their property was not subject to capital gains tax. Their role was to calculate the amount of their French capital gain tax on the sale and to check that the invoices related to works could be deducted to avoid the risk of a subsequent claim from the French authorities. Sellers had to pay around 1% of the total price for this service so this decision will be welcomed by all.

However, residents outside the European Economic Area must continue to appoint a tax representative.

We have not had any information from the French tax authorities about claiming a refund for prior sales for the moment.

Maitre BOUNET - French Lawyer in a Notaire practice in France