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France: Domestic Corporate Taxation

Withholding Taxes on Incoming Dividends

As a member of the EU, France is governed by the provisions of the EU's Parent-Subsidiary Directive. Where a French holding company controls at least 10% (reduced from 15% on 1 January 2009) of the shares of an EU subsidiary for a minimum period of 12 months, any dividends remitted by the EU subsidiary to the French holding company are free of withholding tax.

In general, there is a 12.8% rate of withholding tax on individual non-residents, and a rate of 30% for companies. Beneficiaries and accounts situated in a country that is deemed non-cooperative face a withholding tax rate of 75%.

Where the provisions of the Directive do not apply (or where anti-avoidance provisions are in place) French holding companies can rely on an extensive network of double taxation treaties the effect of which is to obtain a reduction in withholding tax rates on dividends remitted to France from the subsidiary jurisdiction.
France has over 110 double taxation treaties in place. The greater a country's network of double taxation treaties the greater its leverage to reduce withholding taxes on incoming dividends. An elaborate network of double taxation treaties is thus a key factor in the ability of a territory to develop as an attractive holding company jurisdiction.



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