The French Finance Minister has informed Switzerland that France will not renegotiate the revised inheritance tax (IHT) agreement the two countries have drafted if it is rejected by Swiss lawmakers.

The revised Franco-Swiss IHT accord was signed in July 2013 to replace the existing text from 1953. The agreement allows France to tax heirs and beneficiaries of Swiss citizens residing in France under certain conditions, and there are doubts as to whether the Swiss Council of States will approve the agreement on March 18. The text was firmly rejected by the Swiss National Council in December last year.

If the Swiss Council of States blocks the treaty, the Finance Minister has said that France will have to terminate the 1953 agreement, and will not renegotiate the deal. He has argued that the revised agreement is fair for Switzerland and improves the existing situation and bilateral relations, while at the same time facilitating information exchange upon request.

France has made the resolution of other outstanding tax disputes conditional on the adoption of the treaty. These other tax disputes include the taxation of cross-border commuters, lump sum taxation, the issue of the undeclared assets of French residents held in Swiss banks, and unresolved tax issues relating to the bi-national airport Basel-Mulhouse.

France and Switzerland have reiterated their commitment to the new inheritance tax agreement as “preferable to an unregulated situation.” They stated that international progress on the development of a global standard for the automatic exchange of information in tax matters could support a new relationship between the countries, and intend to cooperate in respect of assets that were previously untaxed.