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A code of conduct between France and the Netherlands to prevent double taxation
On 17 July 2006, the French Tax Administration published in circular no. 14 A-3-06 bilateral code of conduct with the Netherlands on the competent authority procedure set forth in Article 27 of the France-Netherlands tax treaty dated 16 March 1973.
This bilateral code of conduct follows a previous general tax circular issued by the French Tax Administration on 23 February 2006 commenting on, and clarifying the rules applicable from a French perspective to, the competent authority process established by tax treaties and by the European Convention dated 23 July 1990 on the elimination of double taxation (Circular no. 14 F-1-06 quoted in Taxand Newsletter issue 3, July 2006).
Both circulars have been issued pursuant to the Code of Conduct adopted by the European Commission on 23 April 2004. In this respect, France has clearly expressed its intention to comply with the recommendations of the Code of Conduct.
It must be noted that a competent authority procedure allows deferral of the collection of the adjusted tax (Section L 189 A of the Book of Tax Procedures) thereby giving this procedure a key strategic scope.