Shares in French civil companies with a preponderance of real estate assets have the character of real estate within the meaning of the Franco-Belgian Tax Treaty

10 June 2020

Conseil d’Etat, 8th & 3rd ch., 24 february 2020, #436392.

It follows from Articles 3 and 22 of the Franco-Belgian Tax Treaty of 10 March 1964 that, to determine the concept of immovable property, reference should in principle be made to the laws of the Contracting State in which the property in question is situated.

It also follows from Article 244 bis A of the French Tax Code that shares in civil companies with a preponderance of real estate are assimilated to immovable property when they are disposed of by a person who is not domiciled in France for tax purposes.

Accordingly, the Administrative Supreme Court (Conseil d’Etat) ruled that there is no need to annul paragraph 130 of Instruction BOI-INT-CVB-BEL-10-10, in so far as it classifies as immovable property, for the purposes of the abovementioned Franco-Belgian Tax Treaty, “rights held in companies whose assets consist mainly of building land or similar property, [as well as] rights held in real estate civil companies of any kind not governed by Article 1655 ter of the French Tax Code and whose assets are essentially composed of buildings other than land for agricultural or forestry use”.