You are a partner in a French partnership with business activity abroad.
You are a foreign partnership (partnership, KG, GmbH & Co. KG etc.) and own a property or carry out a business activity in France.
You are a French tax resident and partner in a foreign partnership.
Taxation in France
Partnerships are companies whose tax regime differs from that of (public) limited companies in that their profits are taxed in the hands of the partners and not at the level of the company itself.
French law encompasses a wide variety of partnerships whose purposes can be civilian or commercial.
This type of company is also present in numerous foreign legislations and here too, they can perform both civil and business activities. In certain countries such as Germany or the United States, these companies represent a privileged vehicle formed to hold a shareholding or conduct a business activity and indeed, it is no longer rare to encounter this type of activity in France for property investments or business activities.
Interposing this type of company can actually be a source of complexity as treaty law and domestic law is, apart from a few exceptions, poorly documented. One of the main challenges lies in the special legal and tax-related features of each foreign partnership which need to be identified prior to each analysis.
Jurisprudence has allowed us to clarify several questions concerning, in particular, the treatment of income, capital gains or corporate tax liability for certain foreign companies. Nevertheless, many situations require a cautious approach as well as substantial experience in view of the unstable character of jurisprudence and administrative doctrine. These grey areas do indeed offer adjustment possibilities for tax authorities (assertion of the lucrative nature of the activity, corporation tax liability, applying withholding taxes etc.).
Altexis has developed particular expertise in dealing with tax problems encountered in France by French and foreign partnerships as well as their partners (residents and non-residents). Furthermore, the law firm has acquired wide experience in issues relating to German partnerships as well as US and related partnerships.
Our services include in particular:
- The tax treatment in France of current income generated by the French or foreign partnership
- The treatment of this revenue in terms of the resident and non-resident partners
- The tax treatment of divestitures of this type of company in terms of the partners
- The analysis of the profit risk of the foreign partnership’s business activity
- The analysis of the risk of the commercial classification of the foreign partnership’s business activity;