List of published territories Albania$$$Algeria$$$Angola$$$Argentina$$$Armenia$$$Australia$$$Austria$$$Azerbaijan$$$Bahrain$$$Barbados$$$Belarus$$$Belgium$$$Bermuda$$$Bolivia$$$Bosnia and Herzegovina$$$Botswana$$$Brazil$$$Bulgaria$$$Cabo Verde$$$Cambodia$$$Cameroon, Republic of$$$Canada$$$Cayman Islands$$$Chad$$$Chile$$$China, People's Republic of$$$Colombia$$$Congo, Democratic Republic of the$$$Congo, Republic of$$$Costa Rica$$$Croatia$$$Cyprus$$$Czech Republic$$$Denmark$$$Dominican Republic$$$Ecuador$$$Egypt$$$El Salvador$$$Equatorial Guinea$$$Estonia$$$Fiji$$$Finland$$$France$$$Gabon$$$Georgia$$$Germany$$$Ghana$$$Gibraltar$$$Greece$$$Greenland$$$Guatemala$$$Guernsey, Channel Islands$$$Guyana$$$Honduras$$$Hong Kong$$$Hungary$$$Iceland$$$India$$$Indonesia$$$Iraq$$$Ireland$$$Isle of Man$$$Israel$$$Italy$$$Ivory Coast (Côte d'Ivoire)$$$Jamaica$$$Japan$$$Jersey, Channel Islands$$$Jordan$$$Kazakhstan$$$Kenya$$$Korea, Republic of$$$Kosovo$$$Kuwait$$$Kyrgyzstan$$$Lao PDR$$$Latvia$$$Lebanon$$$Libya$$$Liechtenstein$$$Lithuania$$$Luxembourg$$$Macau$$$Macedonia$$$Madagascar$$$Malawi$$$Malaysia$$$Malta$$$Mauritius$$$Mexico$$$Moldova$$$Mongolia$$$Montenegro$$$Morocco$$$Mozambique$$$Myanmar$$$Namibia, Republic of$$$Netherlands$$$New Zealand$$$Nicaragua$$$Nigeria$$$Norway$$$Oman$$$Pakistan$$$Palestinian territories$$$Panama$$$Papua New Guinea$$$Paraguay$$$Peru$$$Philippines$$$Poland$$$Portugal$$$Puerto Rico$$$Qatar$$$Romania$$$Russian Federation$$$Rwanda$$$Saint Lucia$$$Saudi Arabia$$$Senegal$$$Serbia$$$Singapore$$$Slovak Republic$$$Slovenia$$$South Africa$$$Spain$$$Sri Lanka$$$Swaziland$$$Sweden$$$Switzerland$$$Taiwan$$$Tajikistan$$$Tanzania$$$Thailand$$$Timor-Leste$$$Trinidad and Tobago$$$Tunisia$$$Turkey$$$Turkmenistan$$$Turks and Caicos Islands$$$Uganda$$$Ukraine$$$United Arab Emirates$$$United Kingdom$$$United States$$$Uruguay$$$Uzbekistan, Republic of$$$Venezuela$$$Vietnam$$$Zambia$$$Zimbabwe JDCN-89JRLJ$$$JDCN-9L9ER3$$$JDCN-89HREB$$$JDCN-89HRGN$$$JDCN-89HRHB$$$JDCN-89HRJM$$$JDCN-89HRKA$$$JDCN-89HRKX$$$JDCN-89HRLL$$$JDCN-89HRM9$$$JDCN-89HRMW$$$JDCN-89HRNK$$$JDCN-89HRP8$$$JDCN-89HRPV$$$JDCN-89HRQJ$$$JDCN-89HRR7$$$JDCN-89HRRU$$$JDCN-89HRSH$$$JDCN-89HRV5$$$JDCN-89HRT6$$$JDCN-89HRTT$$$JDCN-89HRUG$$$JDCN-89HRVS$$$JDCN-89HRWF$$$JDCN-89HRYE$$$JDCN-89HRZ3$$$JDCN-89HRZQ$$$JDCN-89HS2D$$$JDCN-89HS32$$$JDCN-89HS3P$$$JDCN-89PKJ7$$$JDCN-89HS5N$$$JDCN-89HS6B$$$JDCN-89HS6Y$$$JDCN-89HS7M$$$JDCN-89HS8A$$$JDCN-89HS8X$$$JDCN-89HS9L$$$JDCN-89HSA9$$$JDCN-89HSAW$$$JDCN-89HSBK$$$JDCN-89HSC8$$$JDCN-89HSCV$$$JDCN-89HSDJ$$$JDCN-89HSE7$$$JDCN-89HSEU$$$JDCN-89HSFH$$$JDCN-89HSG6$$$JDCN-89HSGT$$$JDCN-9LFTHK$$$JDCN-89HSHG$$$JDCN-89HRX4$$$JDCN-8UENHH$$$JDCN-89HSJ5$$$JDCN-89HSJS$$$JDCN-89HSKF$$$JDCN-8HLNAZ$$$JDCN-89HSL4$$$JDCN-89HSLR$$$JDCN-89HSME$$$JDCN-89HSN3$$$JDCN-89HSNQ$$$JDCN-89HSPD$$$JDCN-89HSQ2$$$JDCN-89HSQP$$$JDCN-89HSRC$$$JDCN-89HSRZ$$$JDCN-89HRXR$$$JDCN-89HSSN$$$JDCN-89HSTB$$$JDCN-89HSTY$$$JDCN-89HSUM$$$JDCN-AN9ENE$$$JDCN-89HSVA$$$JDCN-89HSVX$$$JDCN-8EGQEM$$$JDCN-89HSWL$$$JDCN-89HSX9$$$JDCN-89HSXW$$$JDCN-89HSYK$$$JDCN-89HSZ8$$$JDCN-89HSZV$$$JDCN-89HT2J$$$JDCN-89HT38$$$JDCN-89HT3V$$$JDCN-89HT4J$$$UKWE-8CEb2F$$$JDCN-89HT5U$$$JDCN-89HT6H$$$JDCN-89HT77$$$JDCN-89HT7U$$$JDCN-89HT8H$$$JDCN-89HT96$$$JDCN-8HLRL5$$$JDCN-89HT9T$$$JDCN-97XLRC$$$JDCN-89HTAG$$$JDCN-89HTB5$$$JDCN-89HTCF$$$JDCN-89HTD4$$$JDCN-89HTDR$$$JDCN-89HTEE$$$JDCN-89HTF3$$$JDCN-89HTFR$$$JDCN-BECD9B$$$JDCN-89HTGE$$$JDCN-89HTH3$$$JDCN-89HTHQ$$$JDCN-89HTJD$$$JDCN-89HTK2$$$JDCN-89HTKP$$$JDCN-89HTLC$$$JDCN-89HTLZ$$$JDCN-89HTMN$$$JDCN-89HTNB$$$JDCN-89HTNY$$$JDCN-8UPFL5$$$JDCN-89HTW7$$$JDCN-89HTPM$$$JDCN-89HTQA$$$JDCN-89HTQX$$$JDCN-89HTRL$$$JDCN-89HTS9$$$JDCN-89HTSW$$$JDCN-89HTTK$$$UKWE-8CDMS7$$$JDCN-89HTUV$$$JDCN-89HTWU$$$JDCN-89HTXH$$$JDCN-89HTY6$$$JDCN-89HTZG$$$JDCN-89HU25$$$JDCN-89HU2S$$$JDCN-89HU3F$$$JDCN-8VDJC3$$$JDCN-89HU44$$$JDCN-8V8FQH$$$JDCN-89HU4R$$$JDCN-89HU5E$$$JDCN-B82GFQ$$$JDCN-89HU63$$$JDCN-89HU6Q$$$JDCN-89HU7D$$$JDCN-89HU82$$$JDCN-89HU8P$$$JDCN-89HU9C$$$JDCN-89HU9Z$$$JDCN-89HUAN$$$JDCN-89HUBB$$$JDCN-9LFTHP$$$JDCN-89HUBY Herzegovina$$$Cape Verde$$$Republic of Cameroon$$$People's Republic of China$$$Peoples Republic of China$$$Democratic Republic of the Congo$$$DRC$$$Republic of Congo$$$Channel Islands$$$Channel Islands$$$South Korea$$$Republic of Korea$$$Laos$$$Republic of Lebanon$$$The Netherlands$$$PNG$$$Russia$$$St. Lucia$$$St Lucia$$$Slovakia$$$SA$$$Tobago$$$Republic of Turkey$$$Turks$$$Caicos$$$UAE$$$Great Britain$$$UK$$$Britain$$$Whales$$$Northern Ireland$$$England$$$US$$$U.S.$$$U.S.A.$$$USA$$$Republic of Uruguay$$$Republic of Uzbekistan$$$Republic of Zambia

France Corporate - Withholding taxes

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Payments to resident corporations and individuals are not subject to WHT.

Payments to non-resident corporations and individuals are subject to WHT, as shown below.

In a decision given on 9 November 2015, the French Administrative Supreme Court ruled that a person who is exempt from tax in a contracting state by reason of one’s status or activity cannot be considered liable to taxation and, consequently, is not a resident of the contracting state under the DTT if the treaty defines a ‘resident’ as a person who is liable to tax in a contracting state.

  Dividend WHT (%)
Column 1 Column 2 Column 3 Column 4
Country of residence Individuals and non-parent companies Parent companies Shareholding required to be a parent
Non-treaty 21/30 (37) 30 -
Treaty:      
Algeria 15 5 10
Argentina 15 15 -
Armenia 15 5 10
Australia 15 0 10
Austria 15 0 10
Bahrain 0 0 -
Bangladesh 15 10 10
Belgium 15 0 (1) 10
Benin 30 30 -
Bolivia 15 15 -
Botswana 12 5 25
Brazil 15 15 (2) -
Bulgaria 15 0/5 (1) 10/15
Burkina Faso 15 (19) 30 (2) -
Cameroon 15 15 -
Canada 15 5 10
Central African Republic 15 5 10
China 10 10 -
Comoro Islands (Mayotte) 15/25 15/25 -
Congo, Republic of 20 15 10
Croatia 15 0 10
Cyprus 15 0/10 (1) 10
Czech Republic 10 0 (1) 10
Ecuador 15 15 -
Egypt 0 0 -
Estonia 15 0/5 (1) 10
Finland 0/15 0/5 (1) 10
Gabon 15 15 -
Georgia 10 0/5/10 10/50
Germany 15 0 (3) 10
Ghana 15 5 10
Greece 21/30 (37) 0/30 (1) 10
Hong Kong 10 10 -
Hungary 15 0/5 (1) 10
Iceland 15 0/5 (1) 10
India 10 10 -
Indonesia 15 10 25
Iran 20 15 25
Ireland, Republic of 15 0/10 (1) 10/50
Israel 15 5 10
Italy 15 0/5/15 (1) 10
Ivory Coast 15 15 -
Jamaica 15 15 10
Japan 10 5 10
Jordan 15 5 10
Kazakhstan 15 5 10
Kenya 10 10 -
Korea, Republic of 15 10 10
Kuwait 0 0 -
Latvia 15 0/5 (1) 10
Lebanon 0 0 -
Lithuania 15 0/5 (1) 10
Luxembourg 15 0/5 (1) 10/25
Holding company (4) 30 30 -
Macedonia 15 0 10
Madagascar 25 15 25
Malawi 30 30 -
Malaysia 15 5 10
Mali 15/30 30 (2) -
Malta 15 0 (1) 10
Mauritania 30 30 -
Mauritius 15 5 10
Mayotte 30 25 (2, 5) -
Mexico 15 0/5 5/10
Monaco 25 25 10
Mongolia 15 5 10
Morocco 0/15 0/15 (6) -
Namibia 15 5 10
Netherlands 15 0/5 (1) 10/25
New Caledonia 15 5 (35) -
New Zealand 15 15 -
Niger 25 - -
Nigeria 15 12.5 (35) 10
Norway 15 0 (1) 10
Oman 0 0 -
Pakistan 15 10 10
Philippines 15 10 (35) 10 (36)
Poland 15 5 10
Polynesia, French 30 30 25
Portugal 15 0/5 (1) 10
Qatar 0 0 -
Romania 10 0 (1) 10
Russia 15 5/10/15 (7) -
Russian Federation 15 5 10
St. Pierre & Miquelon 15 5 -
Saudi Arabia 0 0 -
Senegal 15 15 -
Singapore 15 10 10
Slovakia 10 0/10 (1) 20
South Africa 15 5 10
Spain 15 0 10
Sri Lanka 30 30 -
Sweden 15 0/15 (1) 10
Switzerland (8)      
A (9) 15 0 (8) 10 (8)
B (10) 15 (8) 0/15 (8) 10 (8)
C (11) 30 30 -
Thailand 20 15 25
Togo 15/30 25 (2) -
Trinidad and Tobago 15 10 10
Tunisia 30 30 -
Turkey 20 15 -
Ukraine (12) 15 0/5 10/50
United Arab Emirates 0 0 -
United Kingdom 15 0/5 (1) 10
United States 15 0/5 10/80
Uzbekistan 10 5 10
Venezuela 15 0/5 10
Vietnam 15 5 10
Zambia 30 30 50
Zimbabwe 15 10 25

 

  WHT (%)
  Interest Royalties Distributions
Column 1 Column 5 Column 6 Column 7
Country of residence For instruments other than borrowings   Automatically levied on after-tax profits of PEs
Non-treaty (13, 14, 15) 0 (16) 33.33 25
Treaty:      
Algeria 0 5/10 (33) 0
Argentina 0 18 5
Armenia 0 5/10 (33) 5
Australia 0 5 15
Austria 0 0 0
Bahrain 0 0 25
Bangladesh 0 10 15
Belgium 0 0 0/10 (22)
Benin 0 0 25 (17)
Bolivia 0 15 0
Botswana 0 10 5
Brazil 0 10/15/25 (18) 15
Bulgaria 0 0/5 (38) 0/5 (22)
Burkina Faso 0 0 25 (17)
Cameroon 0 15 (19) 15
Canada 0 10 (19) 5
Quebec 0 10 5
Central African Republic 0 0 25 (17)
China 0 6/10 (20) 0
Comoro Islands (Mayotte) 0 33.33 25 (17)
Congo, Republic of 0 15 15
Croatia 0 0 0
Cyprus 0 0 (21, 38) 0/10 (22)
Czech Republic 0 0/5/10 (23, 34, 38) 0 (22)
Ecuador 0 15 15
Egypt 0 15 0
Estonia 0 0/5/10 (34, 38) 0
Finland 0 0 0/15 (22)
Gabon 0 10 0
Georgia 0 0 0
Germany 0 0 0
Ghana 0 10 0
Greece 0 0/5 (38) 0/25 (22)
Hong Kong 0 10 10
Hungary 0 0 0/5 (22)
Iceland 0 0 5
India 0 0 0
Indonesia 0 10 10
Iran 0 10 15
Ireland, Republic of 0 0 0/25 (22)
Israel 0 0/10 (19, 21) 5/10
Italy 0 0/5 (23, 38) 0
Ivory Coast 0 0/10 (24) 0
Jamaica 0 10 10
Japan 0 0 0
Jordan 0 5/15/25 (18) 5
Kazakhstan 0 10 5
Kenya 12 10 25
Korea, Republic of 0 10 5
Kuwait 0 0 25
Latvia 0 0/5/10 (34, 38) 0
Lebanon 0 33.33 25
Lithuania 0 0/5/10 (34, 38) 0
Luxembourg 0 0 0/5 (22)
Holding company (4) 10 to 15 33.33 25
Macedonia 0 0 0
Madagascar 0 10/15 (25, 26) 25
Malawi 0 0/33.33 (19) 10
Malaysia 0 10 (26) 15
Mali 0 0 25 (17)
Malta 0 0/10 (23, 38) 0/10 (22)
Mauritania 0 0 25 (17)
Mauritius 0 0/15 (23) 15
Mayotte 0 0 25 (17)
Mexico 0 10 (20, 23) 0
Monaco 0 33.33 25
Mongolia 0 5 (23) 0
Morocco 0 5/10 (27) 0
Namibia 0 10 (23) 0
Netherlands 0 0 0
New Caledonia 0 10 (23) 10
New Zealand 0 10 15
Niger 0 0 25 (17)
Nigeria 0 12.5 25
Norway 0 0 0
Oman 0 7 25
Pakistan 0 10 0
Philippines 0/15/50 15 10
Poland 0 0/10 (23) 25
Polynesia, French 0 33.33 25 (17)
Portugal 0 0/5 (38) 0/15 (22)
Qatar 0 0 25
Romania 0 0/10 (38) 0/10 (22)
Russia 0 0 0
Russian Federation 0 0 25
St. Pierre & Miquelon 0 10 (23) 10
Saudi Arabia 0 0 25
Senegal 0 0 0
Singapore 0 0 5
Slovakia 0 0/5 (23) 10
South Africa 0 0 0
Spain 0 0/5 (29, 38) 0
Sri Lanka 0 0/10 (30) 25
Sweden 0 0 0 (22, 23)
Switzerland (8)      
A (9) 0 0/5 (8, 31) 0 (8)
B (10) 0 0/5 (8, 31) 0 (8)
C (11) 0 33.33 0 (8)
Thailand 0 5/15 (28) 25
Togo 0 0 25 (17)
Trinidad and Tobago 0 0/10 (20) 10
Tunisia 0 5/15/20 (32) 25 (17)
Turkey 0 10 7.5
Ukraine 0 0/10 25
United Arab Emirates 0 0 0
United Kingdom 0 0 0 (22)
United States 0 0 5
Uzbekistan 0 0 0
Venezuela 0 5 0
Vietnam 0 10 0
Zambia 0 0/33.33 (19) 10
Zimbabwe 0 10 0

Explanation of columns

Column 2: Individuals and companies not qualifying as parents are subject to the WHT rates for dividends as indicated in this column.

Columns 3 and 4: Column 3 indicates the WHT rate for dividends paid to a foreign ‘parent’ company. To be considered as a parent company, the foreign company must hold a specified percentage of the French company’s share capital or voting rights. These minimum percentages range from 0% to 50%, as indicated in Column 4, and certain other conditions must be met (see each treaty). If no percentage is indicated, either no minimum shareholding is required or the tax treaty does not reduce the WHT rate of 30%.

No WHT is levied on dividends paid by a French company to an EU parent or to a parent company of Iceland, Liechtenstein, or Norway that is subject to CIT, provided all the following conditions are met:

  • The parent company has held a minimum percentage of the share capital of the distributing company, directly and continuously, for at least two years. As of 1 January 2009, the participation required is 10%.
  • The parent company is the effective beneficiary of the dividends.
  • The parent company has its effective seat of management in an EU state and is not deemed to be domiciled outside the European Union under an applicable tax treaty.
  • The parent company is one of the legal forms enumerated by the relevant Directive.
  • The parent company is subject to CIT in the member state where it has its effective seat of management.
  • There is an anti-avoidance rule.

Column 5: The tax mechanism has been changed so as to exempt the interest from WHT in France except where the interest is paid to an entity established in a non-cooperative state or territory (WHT at a rate of 75% applicable). The payer can, however, be exempt if one proves that the main purpose and effect of such a payment is not to take advantage of locating the income in such a jurisdiction.

These provisions apply to income paid as of 1 March 2010. A special provision applies to loans entered into outside of France by French companies and some investments funds prior to this date. Interest paid on these loans and on related loans after 1 March 2010 will continue to be exempt.

Column 6: There is no requirement to withhold income tax on royalties paid to EU companies if all the following conditions are met:

  • The taxpayer is a French-resident company or a French PE of a company resident in another EU member state.
  • The recipient of the income is an EU-resident company.
  • The taxpayer and the recipient are at least 25% associates, which means that either one directly holds 25% or more of the share capital or voting rights in the other, or a third party directly holds 25% or more of the capital or voting rights in them both.

Column 7: WHT is automatically imposed on after-tax profits of a PE unless certain conditions are met. The rate is 25% or the reduced tax treaty rate.

Notes

  1. See explanation of Columns 3 and 4.
  2. Exceptions where the dividends are excluded from the taxable income of the company that has received the dividends.
  3. A rate of 15% is applicable for dividends distributed by certain companies.
  4. The 1929-type Luxembourg holding companies are not entitled to any of the benefits of the France-Luxembourg tax treaty.
  5. A 25% rate applies if dividends are not included in the income taxed to either corporate or income tax.
  6. No WHT applies if dividends are taxable in Morocco.
  7. The 5% rate applies to dividends when three conditions are fulfilled, as follows: (1) the effective recipient of the dividends must have invested at least EUR 76,224.51 in the company that pays these dividends; (2) the recipient must be a company liable for CIT; and (3) the latter company must be exempt from CIT. The rate is 10% when only condition (1) or conditions (2 and 3) are fulfilled. In all other cases, the rate is 15%.
  8. An addendum signed on 22 July 1997 modifies the provisions of the French-Swiss tax treaty relating to dividends, interest, and royalties, and provides for the removal of the 5% WHT on profits realised by French PE of Swiss resident companies.
  9. The rate indicated applies to Swiss resident companies controlled by Swiss residents.
  10. The rate indicated applies to Swiss resident companies that are controlled by non-Swiss residents (non-UE) (Article 11.2.b ii) and meet the conditions of Article 14 of the tax treaty. In the case of column 3, the 15% rate applies to these companies, provided both the recipient and the distributing company are not quoted on a stock exchange. If these conditions are not met, the tax exemption applies.
  11. The rate indicated applies to Swiss resident companies controlled by non-Swiss residents but not complying with Article 14 of the tax treaty.
  12. The 5% rate applies to gross dividends if the effective recipient is a Ukrainian company that holds, directly or indirectly, at least 10% of the French company’s capital. The rate is 0% if the participation exceeds 50% and EUR 762,245. It is 15% in all other cases.
  13. Non-treaty recipients of royalties and management fees are subject to a 33.33% withholding rate. Where a treaty exists, management fees are exempt from WHT unless they are included in the definition of royalties subject to WHT.
  14. In France, the WHT is levied on a provisional basis at 25% of the net profit. This amount is reduced to the extent it exceeds the dividends actually paid by the company during the previous 12 months, and the amount of dividends paid to residents of France. Consequently, if the foreign head office undertakes not to distribute dividends in a given year, the after-tax profits of its French branch are not subject to WHT, even when they are transferred abroad.
  15. WHT on interest on loans with a contract is 0%, while withholding on other interest is in a range from 15% to 50%. For treaty rates, consult the individual entry in the table.
  16. The WHT rate can be 60% for certain securities if the investor’s identity is not disclosed.
  17. The WHT is levied on the following amount: French net profit divided by the total foreign company net profit, multiplied by the amount of the distribution.
  18. The rate of 10% is applicable on royalties for the use of literary, artistic, or scientific works, including films; 25% on royalties for the use of trademarks; and 15% otherwise.
  19. No WHT is applicable on a royalty arising from the use of or the right to use literary, artistic, or scientific works (excluding film).
  20. WHT is reduced to 6% for royalties paid for the lease of industrial, commercial, or scientific equipment.
  21. A rate of 5% (Cyprus) and 10% (Israel) is applicable on royalties paid for the use or the right of the use of films.
  22. Profits realised in France by foreign corporations whose head offices are located in a European country are not subject to WHT if certain conditions concerning the foreign corporation are met (effective head office in a European country; foreign corporation subject to corporate taxation).
  23. No WHT is applicable on a royalty arising from the use or the right to use literary, artistic, or scientific works.
  24. No WHT is levied on certain royalties paid in the field of audio visual techniques.
  25. The rate of 15% is applicable on royalties paid for the use of industrial property and trademarks.
  26. A rate of 33.33% is applicable on royalties paid for the use of or the right to use films.
  27. The rate of 5% is applicable on royalties paid for the use of literary, artistic, or scientific works, excluding films.
  28. The rate of 33.33% is applicable on royalties paid for the use of literary and artistic works, including films, and for information concerning commercial experience.
  29. No WHT is levied on royalties paid for the use of or the right to use literary or artistic works, excluding films and recordings.
  30. No WHT is levied on royalties paid for the use of or the right to use copyrights or films.
  31. No WHT is levied on royalties paid for the use of or the right to use industrial, commercial, or scientific equipment.
  32. The rate of 20% is applicable on royalties paid for the use of trademarks, 15% for the use of industrial property, and 5% for the use of literary, artistic, or scientific works.
  33. The rate of 5% is applicable on royalties for the use of literary, artistic, or scientific works, not including films.
  34. The rate of 5% is applicable on royalties for the use or the right to use industrial, commercial, or scientific equipment.
  35. The reduced rate is applicable if the beneficial owner is a company (other than a partnership).
  36. Voting shares solely.
  37. French domestic law decreases the WHT rate from 30% to 21% concerning individuals who are resident in another EU member state, in Iceland, and in Norway.
  38. See explanation of Column 6.

WHT on French-source dividends

The EU WHT exemption extends to dividends paid by foreign companies whose effective place of management is in an EEA member state that has concluded an administrative assistance agreement with France (including Iceland, Liechtenstein, and Norway).

Shares held in bare ownership are taken into account for the computation of the 10% percentage in the distributing entity’s capital in order to benefit from the WHT exemption. The ownership percentage required to benefit from the WHT exemption may be reduced from 10% to 5% if the beneficial owner of the dividends (EU or EEA) cannot offset the French domestic WHT in its home country.

The WHT exemption also applies if dividends are paid to a parent company based in the European Union or in a third country that has concluded an administrative assistance agreement with France that is in a tax loss position and is declared bankrupt or is in a similar situation.

Dividends received by a French parent from qualifying holdings

Shares held in bare ownership are taken into account for the computation of the 5% percentage in the subsidiary’s capital in order to benefit from the participation-exemption regime.

Participation exemption is available for distributions received from entities established in NCSTs, provided the parent company demonstrates that these operations are not designed for, or do not result in, locating profits in such NCST for tax fraud purposes.

There is an exclusion of certain dividend distributions (e.g. distributions made by société d’investissement immobilière côtée [SIIC], société immobilières pour le commerce et l’industrie [SICOMI], société de placement à prépondérance immobilière à capital variable [SPPICAV], etc.) from the participation-exemption regime.

Anti-avoidance rules applicable to Non-Cooperative States or Territories (NCSTs)

The French parent-subsidiary regime is not applicable to dividends paid from entities located in an NCST.

WHT on passive income is 75% for transactions with an NCST person or entity.

Payments (e.g. interests, royalties, payments for services) made to an NCST person or entity are, as a general rule, not tax deductible. In addition, it is not possible to offset WHT in France with any foreign WHT borne by the entity located in an NCST.

Moreover, concerning shareholders (individuals and companies) located in an NCST, a tax amounting to 75% is levied on capital gains derived from the disposal of shares in French companies, whatever the level of shareholding.

In 2018, the list of NCSTs includes Botswana, Nauru, Brunei, Niue, Guatemala, Panama, and Marshall Islands.

General Anti-Abuse Rule (GAAR)

A GAAR provided by the EU Directive is implemented in French law and applies to the:

  • Parent-subsidiary regime.
  • French WHT exemption.

The French GAAR provides that the benefit of these regimes cannot be claimed:

  • if the distributions result from a scheme or series of schemes put in place to obtain, as a main objective or as one of the main objectives, a tax benefit that is contrary to the purpose of the parent-subsidiary regime, and
  • that is not genuine based on the applicable facts and circumstances.

According to parliamentary works, this GAAR aims to exclude from the exemption holding companies with a sole purpose of holding shares.

As of 1 January 2019, an even wider GAAR provision is enacted. It provides that non-genuine arrangements enacted where the main goal, or with one of its main goals, is to benefit from a tax advantage that defeats the objective purpose of the law must be dismissed.

This provision goes further than the historical abuse of law provision.


Last Reviewed - 16 September 2019

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