France

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. When relevant, the rates of dividend WHT mentioned below might be subject to additional requirements with respect to the application of the MLI (i.e. the rates and notes do not include the amending position set out by the MLI application; see below for more information on the MLI). 

Interest

There is generally no requirement to apply WHT from interest in France (FTC, article 119 bis, 1). Since 1 March 2010, interest on French-source loans to lenders domiciled or having their registered office outside France has been generally considered tax-exempt in France.

There are exceptions, notably: for interest from bonds and other negotiable debt securities issued before 1 January 1987, for interest from savings bonds and where the interest is paid to an entity established in a non-cooperative state or territory (WHT at a rate of 75% applicable – see below).                 

Individuals

The rate of WHT under domestic law is set at 12.8% where the beneficiary of the income is an individual (CGI art. 187, 1-2°). This rate came into force for distributed income paid since 1 January 2018 and applies subject to DTT stipulations and specific provisions relating to non-cooperative states or territories.

- The domestic rate applies                        

1. No WHT is levied on dividends paid by a French company to an EU parent or to a parent company in another state party to the Agreement on the European Economic Area – EEA (i.e. Iceland, Liechtenstein, Norway) that has concluded with France an administrative assistance agreement to combat tax fraud and evasion, 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 beneficial owner of the dividends.
• The parent company has its place of effective management in an EU state or in another state in the EEA and is not deemed to be domiciled outside the European Union under an applicable tax treaty.
• The parent company takes one of the forms listed by the Directive or an equivalent form when the company has its effective management seat in another EEA state.
• The parent company is subject to CIT in the member state or in another state in the EEA, where it has its effective seat of management.
• The dividend distribution does not fall under the anti-abuse provisions.

2. Exemption or lower rates on dividends apply under certain conditions depending on the tax treaty (e.g. minimum shareholding, specific requirements regarding the shareholders, in some cases minimum holding period, if the beneficial owner is a company [i.e. not a partnership]).

3. The passive income (i.e. dividend, interest, royalties) clause shall be modified with respect to the most favoured nation clause.

4. The exemption of WHT or the reduced rate is applicable on certain categories of royalties, e.g. royalty arising from the use of, or the right to use, literary, artistic, or scientific works. The definition is specific to each tax treaty.

5. 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 beneficial owner of the income is an EU-resident company.
• The beneficial owner must have its place of effective management in an EU member state.
• The beneficial owner is one of the legal forms listed by the EU Directive.
• The beneficial owner is subject to CIT in the member state where it has its effective place of management without being exempted from it.
• 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 both of them. In any case, the 25% shares must be held for an uninterrupted period of at least two years (or a commitment to respect such requirement might be undertaken by the beneficial owner).

6. The domestic rate apply either to all fees or to certain types of royalties.

7. The exemption applies by virtue of the European Union–Switzerland Exchange of Information Agreement (2004). The exemption also applies if the dividend is paid to a substantial corporate shareholder.

A full exemption from withholding tax on royalties may be available under Article 15 of the EU Savings Agreement, where the paying and the recipient company meet the respective requirements for the application of the exemption.     

8. The domestic rate may apply under certain circumstances on dividends deriving from specific investment vehicle.

9. Domestic tax rate apply because there is no specific provision in the tax treaty.

10. Certain provisions of the tax treaty between France and Russia have been suspended since August 8, 2023. The suspended articles include provisions related to the taxation of permanent establishments, business profits, and passive income such as dividends and royalties, as well as provisions related to elimination of double taxation. As a result, dividends and royalties paid by a French company to a resident Russian company are no longer eligible for treaty benefits (application of the withholding tax at the French domestic rate)

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 unless the entity can demonstrate that its activities are real and it does not seek to locate profits in the 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, unless the entity can demonstrate that its activities are real, and it does not seek to locate profits in the NCST.

The latest French NCST list published in May 2025, includes Anguilla, Antigua and Barbuda, Fiji, Guam, American Virgin Islands, Palaos, Panama, American Samoa, Samoa, Russia, Trinidad and Tobago, the Turks and Caicos Islands, and Vanuatu.

Specific Anti-Abuse Rule (SAAR)

An SAAR provides that the French WHT exemption does not apply to an arrangement or series of arrangements when the following two conditions are met:

• The arrangement, or the series of arrangements, was put into place for the main purpose, or one of the main purposes, of obtaining a tax advantage that defeats the object or purpose of the Directive.
• The arrangement, or the series of arrangements, is not considered as genuine, which means that it does not rely on economic rationale.