§ 1 · Executive answer

Treaty access on the royalty streams, binding on the LU back-to-back PPT.

Preliminary position. Treaty relief is available on the royalty streams only if SG substance supports beneficial ownership and the PPT narrative; otherwise each royalty stream reverts to CGI art. 182 B domestic withholding at 25% gross. Services and hosting streams sit under art. 7 with no French WHT absent a PE. The PPT article is the binding constraint, the back-to-back to the Luxembourg IP HoldCo is the line that fails unless demonstrable economic substance sits at the Singapore level.^{01, 03, 05}

§ 2 · Facts as stated

FR OpCo, French tax resident, will pay SG NewCo (100% held by LU IP HoldCo) for a bundled package: software licence with optional customisation, implementation services on client site, cloud hosting, a transfer of know-how (trade secrets on parameterisation) and end-user training. LU HoldCo is the legal owner of the IP; SG NewCo holds an exclusive sub-licence back-to-back. Contract governed by French law; payment in EUR; FY 2026.

§ 3 · Working assumptions

SG NewCo is a genuine fiscal resident of Singapore within the FR-SG treaty; LU HoldCo is a LU tax resident under FR-LU. Allocation of contract price across the 6 streams is at arm's length and separately invoiced. Implementation is physically performed by SG personnel travelling to France under short-term missions (no PE threshold reached). No ruling or APA is in place.

§ 4 · Legal framework, French domestic law

CGI art. 182 B imposes a withholding on sums paid to non-residents for the use of rights on patents, trademarks, designs, models, know-how, and for services performed or used in France.⁰¹ Domestic rate is 25% of the gross amount in 2026, reducible to the treaty rate when the treaty applies and the beneficial-ownership test is met.⁰⁴

§ 5 · Legal framework, FR-SG treaty and MLI overlay

Article 12 requires a stream-by-stream analysis. Art. 12(1) may block French withholding where the Singapore recipient is the beneficial owner of the royalty. Art. 12(3) preserves French source taxation for certain categories, notably copyright royalties on literary or artistic works and information concerning commercial experience.⁰² Business profits (services) fall under art. 7 with no French withholding unless attributable to a French PE. MLI art. 7 PPT applies, the FR-SG treaty is a covered CTA.⁰⁵

§ 6 · Stream-by-stream outcome

Mixed contracts are to be split per OECD MTC art. 12 §17.4, each element is characterised and priced separately. Where the split is not documented, the French administration can re-qualify the whole package under the dominant characterisation. Outcome is effectively binary per stream: treaty relief applies, or CGI art. 182 B 25% domestic rate stands.^{08, 04}

§ 7 · Beneficial ownership

The FR-SG treaty requires the recipient to be the beneficial owner of the income to claim the reduced rate under art. 12. Planet (CE, 29-06-2022, n° 444858) sets the modern French test: the recipient must have actual disposition of the funds, bear the economic risk, and not be under a contractual or de-facto obligation to on-pay the income.⁰⁷ A pure back-to-back licence SG → LU, with identical economics on the reverse leg, fails the test absent compensating substance in SG.⁰²

§ 8 · Principal purpose test, MLI art. 7

MLI art. 7 denies the treaty benefit where obtaining it was one of the principal purposes of the arrangement, unless granting it is in accordance with the object and purpose of the relevant treaty provision.⁰⁵ The French administration will test the LU → SG interposition: a SG vehicle holding only a back-to-back licence from the LU owner and re-invoicing into France is highly exposed. SG business substance is the only credible defence.

§ 9 · Risk assessment

Medium / High until SG substance is documented. Three compounding factors: (a) LU → SG back-to-back is a textbook PPT pattern; (b) the know-how component invites re-characterisation of the mixed software streams; (c) FR audit practice on non-EU IP structures has hardened post-Planet. Downside exposure: 25% WHT on gross royalties plus penalties and interest.

§ 10 · Next steps, human review focus

Partner review should focus on: (a) SG substance documentation adequate for the PPT narrative; (b) LU recipient-of-record fallback; (c) arm's-length defence of the intra-group sub-licence; (d) PE exposure from on-site implementation if staff stay exceeds treaty thresholds. This memo is a first-pass, not a legal opinion.

Preliminary · FY 2026 · facts as stated. Partner owns the judgment.