With the new agreement, inheritances will be taxed based on where the recipient resides not where the deceased lived, as used to be the case.

France, which taxes inheritance progressively up to 45 per cent, compared with Switzerland's maximum of seven per cent, hopes the new agreement will make it harder for people living in France to evade taxes.

In 2011, France announced that it was considering rescinding the original accord, arguing that it was no longer in line with its policy on agreements. Switzerland in turn decided that a revision was preferable to the risk of double taxation.

Now, France can tax heirs and beneficiaries residing in France, although the authorities will have to deduct any inheritance tax paid in Switzerland. In addition, the agreement also states that indirectly-held property will be taxable in the place where the property is situated.

The agreement is controversial, having been met with negative reactions by various Swiss cantons and interested parties, such as the 190,000 Swiss expats residing in France. As such, provisions were made so heirs and beneficiaries of the deceased who are resident in Switzerland must have resided in France for at least eight out of ten years prior to the receipt, in order for France to exercise its taxing power.

Both countries said the new accord was an important step in solving a series of tax spats, including untaxed assets on Swiss bank accounts and lump sum taxation, as well as a dispute about the Basel-Mulhouse airport shared jointly by France and Switzerland.

Subject to parliamentary approval, the agreement will be enforced from 1 January 2014.