French General Tax Code
In forceI. - Natural persons constituting or benefiting from a trust defined in Article 792-0 bis are subject to a levy set at the highest rate mentioned in 1 of Article 977.
II. - Where their administrator is subject to the law of a State or territory that has concluded an administrative assistance agreement with France with a view to combating tax fraud and tax evasion, the levy does not apply to irrevocable trusts whose sole beneficiaries fall under article 795 or are bodies of the same kind covered by article 795-0 A nor to those set up to manage pension rights acquired, in respect of their professional activity, by beneficiaries under a pension scheme set up by a company or group of companies.
III. - The levy is due:
1° For persons who have their tax domicile in France within the meaning of Article 4 B, in respect of the assets mentioned in Article 965 located in France or outside France placed in the trust;
2° For other persons, in respect only of the assets mentioned in 2° of Article 964 placed in the trust.
However, the levy is not due in respect of the assets mentioned in 1° and 2° of this III when they have been:
a) Included in the assets subject to real estate wealth tax, as the case may be, of the settlor or a beneficiary for the application of article 970 and duly declared in this respect by this taxpayer;
b) Declared, pursuant to Article 1649 AB, in the assets of a settlor or a beneficiary deemed to be a settlor pursuant to 3 of II of Article 792-0 bis, in cases where the settlor or beneficiary is not liable for real estate wealth tax taking into account the net taxable value of his assets, the latter including the assets mentioned in Article 965 placed in the trust.
The levy is based on the net market value at 1 January of the year of taxation of the assets mentioned in article 965 making up the trust.
The consistency and value of the assets mentioned in article 965 placed in the trust are declared and the levy is paid and remitted to the competent public accountant by the trust administrator by 15 June of each year at the latest. Failing this, the settlor and the beneficiaries, other than those mentioned in a and b of this III, or their heirs are jointly and severally liable for payment of the levy.
The levy is assessed according to the rules applicable to real estate wealth tax and recovered according to the rules and under the penalties and guarantees applicable to death duties.
