Media and News

The “Dutreil” pact in a French-Swiss context: aprecautionary measure to effectively reduce the French tax cost of a company transfer


June 2023
Jean-Luc Bochatay and Jérôme Bissardon


The fact that a company and its shareholders are located in Switzerland sometimes makes people forget that inheritance and gift tax are payable in France, even though the deceased (or the donor) is not domiciled there, but one of his/her heirs (or a donee) is.
It is true that the ‘extensive’ scope of French tax law on gratuitous transfers is limited by certain double taxation agreements (“DTAs”) – such as the DTA between France and Italy, for example – but the DTA between Switzerland and France was terminated with effect from 1stJanuary 2015.
Failure to prepare for the transfer of a company to your children can have serious tax consequences – i.e., up to 45% in inheritance tax!
In this respect, the “Dutreil” scheme provided for in Article 787 B of the French General Tax Code appears “salutary” in that it reduces the tax burden inherent in the transfer of a company by inheritance or gift by up to 75% (and sometimes more).

Yann Bellini

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