Foreign charities can obtain full inheritance and gift tax exemption in France under Article 795-0 A CGI by securing French tax approval. Learn why UK charities no longer qualify post-Brexit and discover how to establish a compliant French entity.

Donations and Legacies to Foreign Charities: How to Secure French Inheritance Tax Exemption

When a donation or legacy involves a foreign charitable organisation, French tax law applies specific rules that can make a decisive difference between full exemption and 60% taxation.

At the heart of this issue lies Article 795-0 A of the French General Tax Code (Code général des impôts, CGI) — a crucial provision for charities wishing to receive gifts or legacies from French donors or in respect of assets located in France.

Understanding Article 795-0 A CGI: The Key to Exemption

Under French tax law, certain non-profit organisations pursuing charitable, philanthropic, or public interest purposes are entitled to receive gifts and legacies free of inheritance and gift tax.

While this exemption originally applied to French entities only, Article 795-0 A CGI extends the same benefit to foreign charities, provided they obtain official approval (agrément) from the French tax authorities.

Once granted, this approval allows the organisation to be treated as if it were established in France — ensuring complete exemption from transfer duties on donations and legacies made by:

• Donors domiciled in France, or
• Deceased persons who were tax-resident in France, or
• Transfers involving assets located in France.

Without this approval, the charity would face inheritance or gift tax at the rate of 60%, which can substantially reduce the value of the donation or legacy.

Why Foreign Charities Should Apply for French Tax Approval

Obtaining the agrément is a strategic opportunity for any charitable organisation with links to France. It ensures that the charity can receive support from French donors or beneficiaries without any tax erosion, allowing more of the donation to serve its philanthropic purpose.

To qualify, the organisation must demonstrate that:

• Its activities and objectives are comparable to those of French charitable bodies;
• It operates on a non-profit and transparent basis;
• It is subject to appropriate governance and regulatory oversight.

Approval, once granted, generally applies to all future gifts and legacies — not just to a single transaction.

Charities Outside the EU or EEA: The Role of Reciprocity

A common misunderstanding is that only charities established within the European Union (EU) or the European Economic Area (EEA) can apply for approval under Article 795-0 A CGI.

In fact, non-EU or non-EEA charities may also qualify, if a reciprocity regime exists between France and the country in which the charity is established.

Such reciprocity must stem from:

• A bilateral tax treaty, or
• A specific international agreement providing for mutual exemption of charitable gifts and legacies.

Where no such reciprocity exists, French approval cannot be granted.

The United Kingdom: A Post-Brexit Limitation

Since Brexit took effect on 31 January 2020, UK-based charities have lost the automatic benefit of this favourable French tax regime.

Despite the wording of Article 795-0 A CGI, which refers to organisations established in the EU or EEA, no reciprocity arrangement currently exists between France and the United Kingdom.

• The Franco-British tax treaty of 21 June 1963 contains no provisions concerning reciprocal tax exemptions for charitable gifts or bequests.
• The UK tax reform effective from 15 March 2023 (with transitional rules until 1 April 2024) explicitly restricts inheritance tax relief to UK-based charities only — thereby excluding foreign (including French) entities.
  See HMRC Inheritance Tax Manual IHTM11116.

Consequently, in the absence of any mutual recognition or treaty provision, UK charities can no longer qualify for the French tax exemption provided by Article 795-0 A CGI.

A Practical Alternative for Foreign Charities

All is not lost for non-EU charities, including those based in the United Kingdom. A practical and effective solution is to establish a French entity or registered branch that can itself apply for the agrément.

There are various legal structures available under French law — from associations to foundations or representative offices — depending on the organisation’s objectives and level of activity.

Setting up a French vehicle not only allows the charity to benefit from the exemption but also helps strengthen its visibility and credibility in France.

Our notarial office advises and assists foreign charitable organisations in:

• Assessing their eligibility for French tax approval;
• Selecting the most appropriate legal structure;
• Preparing and submitting a complete and compliant application file.