January 25 2021 When enacted in 1978, Article 244 bis B of the French Tax Code (FTC) provided for thetaxation of capital gains recognised upon the disposal by non-French natural persons or look-through partnerships of a significant shareholding (more than 25%) in a French entity. This tax mechanism was later modified to include the capital gains realised by non-resident companies subject to a tax that is comparable to French corporate income tax (CIT), by the French Amending Finance Law dated December 30 1993, which came into force on January 2 1994. As an exception to the principle of taxation of capital gains on movable properties in the state of residence provided in double tax treaties (DTTs), this tax only applies to taxpayers established in countries that have not concluded a DTT with France, or in countries having concluded a DTT which expressly allows the source state to apply such tax (e.g. Austria, Italy, Spain, or Sweden).