New guideline on recognition of transparency principle for foreign partnerships

On 29 March 2007, the French tax administration issued a Guideline on the application of tax treaties to French-source passive income received via foreign partnerships. This note considers the Guideline by way of a summary of the OECD approach in the situations covered by the Guideline, and descriptions of the traditional French translucency approach, the changes entailed by the Diebold decision and the most important provisions of the Guideline.