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Swiss Inheritance Tax Deal With France Challenged In Switzerland

by Ulrika Lomas, Tax-News.com, Brussels

28 August 2012


The economy commission of the Swiss National Council has rejected the new draft Double Tax Convention (DTC) between France and Switzerland. This DTC has been negotiated but not yet signed.

The commission's president, Christophe Darbellay, said that “the majority of the commission is extremely sceptical.”

The new DTC between France and Switzerland revises the applicable inheritance tax regime. Under the new treaty, France would have jurisdiction to tax the worldwide assets of a Swiss resident provided a beneficiary is resident in France and had been French resident for at least six years out of the last ten years. During the negotiations, France had threatened to abrogate the exisiting DTC if Switzerland did not accept the changes.

The new agreement, amending the existing DTC dating from 1953, has been criticized mainly for bringing advantage only to France and none to Switzerland.

Some commissioners have even said that it would be preferable to risk having no DTC at all than face a national humiliation at a time when Switzerland's reputation as a safe haven is under pressure.

Commission member Fulvio Pelli has also deplored the speed of negotiations, and says that “little attention has been paid as to the consequences”.

The new DTC between France and Switzerland is due to enter into force in 2014 if it survives the ratification process.

TAGS: inheritance tax | tax | investment | law | France | Switzerland

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