Real estate capital gain subject to 33.33 % in 2013 and 2014 must claim before the end of this year 2014 for lower taxation of French partnerships held by non-EEA residents ruled contrary to EU law

The French Administrative Supreme Court (Conseil d’Etat) ruled that a French partnership (eg. SCI…) held by individuals who are not residing in a European Economic Area (EEA) member country cannot be taxed, in regard to a capital gain resulting from the sale of an immovable property located in France, at a rate higher than the rate at which French partnerships held by EEA residents are taxed. CE 20 October 2014 n° 367234.

In practice, the standard rate applied of the corresponding withholding tax was 33.33%.

However, individuals residing in an EU Member State or in an EEA member country, which has concluded with France a tax treaty including an administrative assistance clause, must only be subject to a 19% rate.

As a consequence, its time to claim before the end of this year (2014) for non-resident individuals or legal person, or members of a French partnership, which was subject to such taxation in 2013 and 2014