Paris
EY Société d’Avocats
+33 1-55-61-10-00
Tour First Fax: +33 1-58-47-10-05
1, Place des Saisons
TSA 14444
92037 Paris La Défense Cedex France
Principal Tax Contact
Lionel Benant, +33 1-55-61-17-20 Managing Partner Mobile: +33 6-80-11-58-44 Email: lionel.benant@ey-avocats.com
International Tax and Transaction Services – International Corporate Tax Advisory
Claire Acard, +33 1-55-61-10-85 Tax Quality Leader Mobile: +33 6-11-24-38-58 Email: claire.acard@ey-avocats.com Jean-Laurent Bargiarelli +33 1-55-61-11-89 Mobile: +33 6-72-84-29-65 Email: jean-laurent.bargiarelli@ey-avocats.com Matthieu Dautriat, +33 1-55-61-11-90 Financial Services Mobile: +33 6-19-69-07-12 Organization ITTS Tax Leader Email: matthieu.dautriat@ey-avocats.com
Alexandra Loran +33 1-55-61-18-51 Mobile: +33 6-46-76-06-40 Email: alexandra.loran@ey-avocats.com
Philippe Legentil, +33 1-55-61-12-48 Real Estate Mobile: +33 6-08-74-64-56 Email: philippe.legentil@ey-avocats.com
Aude Mary, +33 1-55-61-12-57 Financial Services Mobile: +33 6-84-99-25-98 Organization Email: aude.mary@ey-avocats.com Bruno Messerschmitt, +33 1-55-61-17-21 Africa Mobile: +33 6-84-02-72-51 Email: bruno.messerschmitt@ey-avocats.com
Didier Tixier +33 1-55-61-13-76 Mobile: +33 6-08-76-14-07 Email: didier.tixier@ey-avocats.com
Morgan Vail +33 1-55-61-12-26 Mobile: +33 7-78-68-29-84 Email: morgan.vail@ey-avocats.com
Eric Verron +33 1-55-61-13-31 Mobile: +33 6-72-84-30-43 Email: eric.verron@ey-avocats.com
International Tax and Transaction Services – Transaction Tax Advisory Matthieu Autret +33 1-55-61-18-66 Mobile: +33 6-43-02-25-65 Email: matthieu.autret@ey-avocats.com
Jean-Philippe Barbé +33 1-55-61-14-30 Mobile: +33 6-18-77-05-12 Email: jean-philippe.barbe@ey-avocats.com
Lionel Benant +33 1-55-61-17-20 Mobile: +33 6-80-11-58-44 Email: lionel.benant@ey-avocats.com
Cédric Devouges
+33 1-55-61-17-74
Mobile: +33 6-89-09-71-27 Email: cedric.devouges@ey-avocats.com Sandrine Gobaut +33 1-55-61-18-07 Mobile: +33 6-89-53-38-10 Email: sandrine.gobaut@ey-avocats.com
Cédric Lantonnois von Rode, +33 1-55-61-11-04
Financial Services
Mobile: +33 6-08-74-69-71 Organization Email: cedric.lantonnois.van.rode@ ey-avocats.com
Magali Lévy +33 1-55-61-12-29
Mobile: +33 6-74-57-71-54 Email: magali.levy@ey-avocats.com
Sylvie Magnen +33 1-55-61-12-22 Mobile: +33 6-86-49-71-25 Email: sylvie.magnen@ey-avocats.com
Benjamin Pique +33 1-55-61-13-04
Mobile: +33 7-78-20-02-61 Email: benjamin.pique@ey-avocats.com Nevenna Todorova +33 1-55-61-14-60
Mobile: +33 7-78-88-27-26 Email: nevenna.todorova@ey-avocats.com
International Tax and Transaction Services – Tax Desks Abroad
Mathieu Pinon
+1 (212) 773-2021 (resident in New York) Email: mathieu.pinon1@ey.com
Frederic Vallat
+1 (212) 773-5889 (resident in New York)
Mobile: +1 (646) 236-0530 Email: frederic.vallat@ey.com
International Tax and Transaction Services – International Capital Markets
Claire Acard +33 1-55-61-10-85 Mobile: +33 6-11-24-38-58 Email: claire.acard@ey-avocats.com Soraya El Bsat, +33 1-55-61-13-84 Financial Services Mobile: +33 6-46-76-08-95 Organization Email: soraya.el.bsat@ey-avocats.com
International Tax and Transaction Services – Operating Model Effectiveness
Jean-Laurent Bargiarelli
+33 1-55-61-11-89
Mobile: +33 6-72-84-29-65 Email: jean-laurent.bargiarelli@ey-avocats.com
Alexandra Loran +33 1-55-61-18-51 Mobile: +33 6-46-76-06-40 Email: alexandra.loran@ey-avocats.com
International Tax and Transaction Services – Transfer Pricing
Karen Chauveau
+33 1-55-61-16-29
Mobile: +33 6-72-75-88-37 Email: karen.chauveau@ey-avocats.com
Eric Fourel +33 1-55-61-11-22
Mobile: +33 6-11-67-09-94 Email: eric.fourel@ey-avocats.com
Benoit Gabelle +33 1-55-61-15-81 Mobile: +33 6-01-45-38-08 Email: benoit.gabelle@ey-avocats.com
Patrice Jan +33 1-56-61-11-10
Mobile: +33 6-17-89-05-20 Email: patrice.jan@ey-avocats.com
Emmanuelle Leroy +33 1-55-61-14-10 Mobile: +33 6-29-34-07-29 Email: emmanuelle.leroy@ey-avocats.com
Alexis Popov +33 1-55-61-15-96
Mobile: +33 6-46-79-42-66 Email: alexis.popov@ey-avocats.com
Nadia Sabin +33 1-55-61-10-15 Mobile: +33 7-63-33-24-04 Email: nadia.sabin@ey-avocats.com
Business Tax Services
Xavier Dange, +33 1-55-61-11-28 France Business Tax Mobile: +33 6-88-38-40-95 Services Leader Email: xavier.dange@ey-avocats.com
Tax Policy and Controversy
Jean-Pierre Lieb, +33 1-55-61-16-10
EMEIA Tax Policy and Mobile: +33 6-34-16-72-80 Controversy Leader Email: jean.pierre.lieb@ey-avocats.com
Charles Menard +33 1-55-61-15-57 Mobile: +33 6-80-05-98-38 Email: charles.menard@ey-avocats.com
Agnès Serero, Local Taxes +33 1-55-61-14-15 Mobile: +33 6-98-73-54-61 Email: agnes.serero@ey-avocats.com
Business Tax Advisory
Amandine Allix-Cieutat, +33 1-55-61-33-84 Private Tax Mobile: +33 6-64-05-95-08 Email: amandine.allix.cieutat@ ey-avocats.com
Benjamin Bardet, +33 1-55-61-14-51 Local Taxes Mobile: +33 6-86-42-26-83 Email: benjamin.bardet@ey-avocats.com Anne-Lyse Blandin +33 1-55-61-14-25 Mobile: +33 6-62-89-85-84 Email: anne.lyse.blandin@ey-avocats.com Caroline Chaize-Lang, +33 1-55-61-13-02
Financial Services Mobile: +33 6-11-67-98-91 Organization Email: caroline.chaize.lang@ey-avocats.com Marie-Amélie Deysine, Tax Knowledge Leader +33 1-55-61-14-24 Mobile: +33 6-84-28-38-16 Email: marie.amelie.deysine@ey-avocats.com Natacha Gavrilovic +33 1-55-61-14-17 Mobile: +33 6-70-77-28-17 Email: natacha.gavrilovic@ey-avocats.com Régis Houriez, +33 1-55-61-12-06 EMEIA Business Tax Mobile: +33 6-07-70-79-71 Services Leader Email: regis.houriez@ey-avocats.com Loubna Lemaire, +33 1-55-61-13-44
Financial Services Mobile: +33 6-19-47-36-93
Organization – Bank Email: loubna.lemaire@ey-avocats.com
Pierre Mangas, +33 1-55-61-15-82
Private Tax Mobile: +33 6-87-71-05-47 Email: pierre.mangas@ey-avocats.com
Alexis Marion +33 1-46-93-45-18 Mobile: +33 7-65-15-58-83 Email: alexis.marion@ey-avocats.com
Vincent Natier, +33 1-55-61-12-61 Financial Services Mobile: +33 6-07-70-85-35
Organization – Tax Market Segment Leader Email: vincent.natier@ey-avocats.com
Franck Van Hassel, +33 1-55-61-11-40 Private Tax Mobile: +33 6-08-74-69-44 Email: franck.van.hassel@ey-avocats.com
Tax Technology and Transformation
Gwenaelle Bernier, +33 2-51-17-50-31 Tax Technology and Mobile: +33 6-80-04-37-63 Transformation Leader Email: gwenaelle.bernier@ey-avocats.com Marc-Fabian Jourdain +33 1-55-61-17-50
Mobile: +33 6-86-42-25-99 Email: marc.fabian.jourdain@ey-avocats.com
Filipe de Almeida, +33 1-55-61-14-73
Financial Services Mobile: +33 6-21-72-81-54 Organization Email: filipe.de.almeida@ey-avocats.com
Global Compliance and Reporting
Pascale Attia +33 1-46-93-85-43
Mobile: +33 6-74-57-73-20 Email: pascale.attia@fr.ey.com
Damien Aubert +33 1-46-93-72-43
Mobile: +33 6-88-38-23-01 Email: damien.aubert@fr.ey.com
Brigitte Auberton, +33 1-55-61-11-52 Tax Accounting and Mobile: +33 6-12-28-04-20 Risk Advisory Email: brigitte.auberton@ey-avocats.com
Arnaud de Roucy +33 1-55-61-19-97
Mobile: +33 6-08-69-72-79 Email: arnaud.de.roucy@ey-avocats.com
Laure Deshayes +33 1-46-93-58-55 Mobile: +33 6-24-32-19-47 Email: laure.deshayes@fr.ey.com
Philippe Favard +33 1-46-93-74-09 Mobile: +33 7-60-36-44-34 Email: philippe.favard@fr.ey.com
Anne-Sophie Gréard, +33 1-55-61-12-92
Financial Services Mobile: +33 6-17-89-04-39 Organization Email: anne-sophie.greard@ey-avocats.com
Guillaume Levrat +33 1-46-93-81-11
Mobile: +33 7-78-80-29-02 Email: guillaume.levrat@fr.ey.com
Nathalie Mogodin
+33 1-46-93-66-57
Mobile: +33 6-11-24-99-62 Email: nathalie.mogodin@fr.ey.com
Brigitte Rames +33 1-46-93-88-74 Mobile: +33 6-88-24-19-78 Email: brigitte.rames@fr.ey.com
Christophe Saillant
+33 1-46-93-67-69
Mobile: +33 6-89-88-39-29 Email: christophe.saillant@fr.ey.com
Pascale Savouré +33 1-55-61-19-75
Mobile: +33 6-84-99-33-61 Email: pascale.savoure@ey-avocats.com
Christian Scholer +33 1-46-93-63-30 Mobile: +33 6-09-24-24-86 Email: christian.scholer@fr.ey.com
Jean-Baptiste Schoutteten
People Advisory Services
+33 1-46-93-84-72
Mobile: +33 6-07-70-71-72 Email: jean-baptiste.schoutteten@fr.ey.com
Emmanuel Morisson-Couderc +33 1-55-61-13-69
Mobile: +33 6-82-55-73-25 Email: emmanuel.morisson-couderc@ey-avocats.com
Indirect Tax and Customs
Jean-David Vasseur
+33 1-55-61-15-17
Mobile: +33 6-17-65-67-35 Email: jean-david.vasseur@ey-avocats.com
Legal Services
Anne-Elisabeth Combes, +33 1-55-61-13-77 Employment Law
Mobile: +33 6-78-43-58-24 Email: anne.elisabeth.combes@ey-avocats.com
Virginie Lefebvre-Dutilleul, +33 1-55-61-10-62 Health Care Mobile: +33 6-24-32-31-77 Email: virginie.lefebvre-dutilleul@ey-avocats.com
Frédéric Reliquet, +33 1-55-61-19-86 Business Law Mobile: +33 6-03-53-31-51 Email: frederic.reliquet@ey-avocats.com
Jean-Christophe Sabourin, +33 1-55-61-18-55 Transaction Mobile: +33 6-08-74-65-18 Email: jean.christophe.sabourin@ey-avocats.com
Bordeaux GMT +1
EY Société d’Avocats
+33 5-57-85-47-00
Hangar 16, Entrée 2 Fax: +33 5-57-85-47-01 Quai de Bacalan 33070 Bordeaux Cedex France
Private Tax
Johan Gaulin
+33 5-57-85-47-38 Mobile: +33 6-74-89-04-85 Email: johan.gaulin@ey-avocats.com
Lille GMT +1
EY Société d’Avocats +33 3-28-04-35-35 14, rue du Vieux Faubourg Fax: +33 3-28-04-38-35 59042 Lille Cedex France
International Tax and Transaction Services – International Corporate Tax Advisory
Etienne Durieux +33 3-28-04-38-01 Mobile: +33 6-69-63-74-73 Email: etienne.dureix@ey-avocats.com
Lyon GMT +1
EY Société d’Avocats
+33 4-78-63-17-17 Tour Oxygène Fax: +33 4-78-63-17-00 10-12 boulevard Marius Vivier Merle 69393 Lyon Cedex 03 France
International Tax and Transaction Services – Transfer Pricing
Franck Berger +33 4-78-63-17-10 Mobile: +33 6-08-75-60-93 Email: franck.berger@ey-avocats.com
Business Tax Advisory
+33 4-78-63-17-75 Mobile: +33 6-23-08-80-05 Email: joel.fischer@ey-avocats.com Laure Tatin-Gignoux +33 4-78-63-17-48 Mobile: +33 6-71-04-21-15 Email: laure.tatin@ey-avocats.com
Joël Fischer
Marseille GMT +1
EY Société d’Avocats
+33 4-91-23-99-00
Fax: +33 4-91-23-99-40 Quartier Euromed 48, Quai du Lazaret CS 80471
Immeuble Le Calypso
13217 Marseille Cedex 02 France
Business Tax Advisory
Pierre-André Lormant
+33 4-91-23-99-08
Mobile: +33 6-07-36-46-82 Email: pierre-andre.lormant@ey-avocats.com
Nantes GMT +1
EY Société d’Avocats +33 2-51-17-50-00
3 rue Emile Masson
Fax: +33 2-51-17-50-01 44019 Nantes Cedex 1 France
International Tax and Transaction Services – Transfer Pricing
Jean-Baptiste Redor
Private Tax
Philippe Vailhen
+33 2-51-17-50-23 Mobile: +33 6-89-53-32-60 Email: jean-baptiste.redor@ey-avocats.com
+33 2-51-17-50-02 Mobile: +33 6-08-74-64-04 Email: philippe.vailhen@ey-avocats.com
Rennes GMT +1
EY Société d’Avocats +33 2-23-45-12-11 2 bis, Place Sainte Melaine Fax: +33 2-23-45-12-27 BP 10126 35101 Rennes Cedex 3 France
Private Tax
Philippe Vailhen
Strasbourg
EY Société d’Avocats
+33 2-51-17-50-02 Mobile: +33 6-08-74-64-04 Email: philippe.vailhen@ey-avocats.com
GMT +1
+33 3-88-15-24-50
Fax: +33 3-88-22-65-27 20 Place des Halles
Tour Europe
BP 80004
67081 Strasbourg Cedex France
International Tax and Transaction Services – International Corporate Tax Advisory
Philippe Paul-Boncour
+33 3-88-22-87-88 Mobile: +33 6-72-84-30-33 Email: philippe.paul-boncour @ey-avocats.com
International Tax and Transaction Services – Transfer Pricing Olivier Marichal
+33 3-88-22-87-10 Mobile: +33 6-17-71-46-72 Email: olivier.marichal@ey-avocats.com
A. At a glance
Corporate Income Tax Rate (%) 25 (a)
Capital Gains Tax Rate (%) 0/15/19/25 (a)(b)
Branch Tax Rate (%) 25
Withholding Tax (%)
Dividends 25/75 (c)(d)(e)
Interest 0/75 (c)(f)(g)
Royalties from Patents, Know-how, etc. 25/75 (c)(f)(g)
Branch Remittance Tax 25 (h)
Net Operating Losses (Years)
Carryback 1 (i)
Carryforward Unlimited (j)
(a) For resident companies, surtaxes are imposed on the corporate income tax and capital gains tax. For details, see Section B.
(b) For details concerning these rates, see Section B.
(c) These are the withholding tax rates under French domestic law. Tax treaties may reduce or eliminate the withholding taxes.
(d) Under the European Union (EU) Parent-Subsidiary Directive and Article 119 ter of the French Tax Code, dividends distributed by a French subsidiary to an EU parent company are exempt from withholding tax, if, among other conditions, the recipient holds or commits to hold at least 5% of the subsid iary’s shares for at least two years. For details, see Section B.
(e) The withholding tax rate is 75% for distributed profits paid into uncoopera tive states.
(f) No withholding tax is imposed on interest and royalties paid between associ ated companies of different EU member states if certain conditions are met. For details, see Section B.
(g) The withholding tax rate is 75% for interest on qualifying borrowings and royalties paid into uncooperative states.
(h) Branch remittance tax may be reduced or eliminated by double tax treaties. It is not imposed on French branches of companies that are resident in EU mem ber states and are subject to tax in their home countries.
(i) Losses carried back may not exceed EUR1 million.
(j) The amount of losses used in a given year may not exceed EUR1 million plus 50% of the taxable profit exceeding this limit for such year.
B. Taxes on corporate income and gains
Corporate tax. The taxation of French companies is based on a territorial principle. As a result, French companies carrying on a trade or business outside France are generally not taxed in France on the related profits and cannot take into account the related losses. However, under the French controlled foreign company (CFC) rules contained in Article 209 B of the French Tax Code, income earned by a French enterprise through a foreign enterprise may be taxed in France if such income is subject to an effective tax rate that is 40% lower than the French effective tax rate on similar income (for further details, see Section E). French com panies are companies registered in France, regardless of the nation ality of the shareholders and companies that have their place of effective management in France. Foreign companies carrying on an activity in France are subject to French corporate tax on their French-source profits.
Profits derived in France by branches of nonresident companies are deemed to be distributed, normally resulting in the imposition of a branch withholding tax of 25% on after-tax income. This tax is not imposed on the profits of French branches of companies that are resident in EU member states and that are subject to corporate income tax in their home countries. It may be reduced or eliminated by tax treaties. Although branch withholding tax normally applies to undistributed profits, such profits may be
exempted from the tax if an application is filed with the tax au thorities and if certain requirements are met.
Rates of corporate tax. For financial years beginning on or after 1 January 2022, companies are subject to a 25% corporate tax rate.
A social security surtax of 3.3% is assessed on the corporate income tax amount. This surtax is imposed on the portion of cor porate tax due exceeding EUR763,000 before offsetting the tax credits granted under tax treaties (see Foreign tax relief). The 3.3% surtax does not apply to companies whose annual turnover is lower than EUR7,630,000 if at least 75% of the company is owned by individuals or by companies that themselves satisfy these conditions.
Members of consolidated groups must take into account the global turnover of the group to determine whether they reach the EUR7,630,000 threshold mentioned above.
A reduced corporate tax rate of 15% applies to the first EUR38,120 of the profits of small and medium-sized enterprises if certain conditions are met, including the following:
• The turnover of the company is less than EUR10 million.
• At least 75% of the company is owned by individuals or by companies that themselves satisfy this condition and the above condition.
Capital gains. Capital gains derived from the sale of fixed assets by French companies are subject to corporate income tax at the standard rate.
Capital gains derived from the sale of qualifying participations that have been held for at least two years before their sale are exempt from tax. The following are qualifying participations:
• Titres de participation (specific class of shares for accounting purposes that enables the shareholder to have a controlling interest)
• Participations eligible for the dividend participation exemption regime if the shareholder holds at least 5% voting rights
However, the corporate income tax applies to 12% of the gross capital gains realized on qualifying participations. As a result, the effective tax rate on such gains is 3% (based on a 25% standard corporate tax rate). Capital losses incurred with respect to such qualifying participations may no longer be offset against capital gains.
This participation exemption regime does not apply to capital gains derived from the sale of qualifying participations in a com pany established in an uncooperative country (as defined in Article 238-0 A of the French Tax Code; see Section E), unless it is demonstrated that the foreign company’s activities are real and do not aim to localize revenues in an uncooperative country.
Under certain conditions, the sale of units in venture mutual funds (FCPRs, FPCIs and SLPs) and venture capital investment companies (SCRs) may benefit from the long-term regime if the units have been held for at least a five-year period. Under this regime, the capital gains are fully exempt up to the part of the
funds or investment companies’ assets represented by participa tion shares and subject to a 15% tax rate for the exceeding portion.
Long-term capital losses can be offset against any kind of longterm capital gains.
The exemption or reduced rate also applies to various distribu tions made by the FCPRs and SCRs after a two-year-holding period. Capital gains derived from sales of participating interests in companies that are predominantly real estate companies are subject to tax at the standard rate. For sales of participating inter ests in listed real estate companies that have been held for at least two years before their sale, the rate is reduced to 19%.
Long-term capital gains derived from the first sale of participat ing interests in companies whose assets’ value is mainly com posed of television broadcasting rights are subject to tax at a rate of 25%.
Capital gains and income derived from patents and patentable rights. A reduced tax rate of 10% applies on an election per formed on an asset-by-asset basis (or, under certain conditions, on a group-of-assets basis), to the net income derived from the licensing of qualifying patents or software, and after deduction of the research and development (R&D) expenses incurred during the financial year (a recapture of R&D expenses incurred since the financial year for which the election was made applies the first time the net income is calculated). If negative, the result is carried forward and deducted from income derived in subsequent years from the licensing of the qualifying patent or software. If positive, a ratio, which cannot be greater than 100%, is applied to determine the net income subject to the 10% rate. This ratio compares the following:
• 130% of the R&D expenses incurred for the creation, or the development of the qualifying patent, either by the claiming taxpayer or by unrelated parties
• The total R&D expenses incurred for the creation, the develop ment, or the acquisition of the qualifying patent
For the calculation of the ratio, the R&D expenses include expenses incurred prior to the election, eventually limited to those incurred during financial years beginning on or after 1 January 2019 (specific recapture rules apply for the financial years beginning in 2019 and 2020). A safe harbor provision allows election of a replacement ratio, subject to an agreement with the tax authorities.
The same tax treatment could apply, also on the basis of an elec tion, to the net income derived from the sublicensing of qualify ing patents, and to the net gains derived from the transfer to unrelated parties of qualifying patents, provided that the latter was not acquired less than two years before. Qualifying patents include copyright-protected software but do not include patent able rights (except for small and medium-sized companies under certain circumstances).
For French tax consolidated groups, this election is available at the group level. The net income and ratio are determined at the group level.
Administration. In general, companies must file a tax return before the second business day after 1 May for financial years closing on 31 December or within three months following the end of their financial year in other cases.
Corporate income tax is prepaid in four installments. Companies that have their financial year ending on 31 December must pay the installments on 15 March, 15 June, 15 September and 15 December. The balance of corporate tax is due by 15 May for financial years closing on 31 December or by the 15th day of the 4th month following the end of the financial year in other cases. The rules governing the payment of corporate income tax also apply to the payment of the 3.3% surtax.
Companies must file their corporate income tax and VAT returns electronically. If a company does not comply with this require ment, a 0.2% penalty is imposed.
In general, late payment is subject to a 5% penalty, and late filing is subject to a 10% penalty. If additional tax is payable as a result of a reassessment of tax, interest is charged at 0.2% per month (2.4% per year). Many exceptions and specific rules apply to interest and penalties.
Dividends. Dividends paid by French companies no longer carry a tax credit (avoir fiscal). However, under the parent-subsidiary regime, dividends received by French companies or French branches of nonresident companies are exempt from corporate income tax, except for a 5% service charge computed on the gross divi dend income (net dividend income and foreign tax credits) and added back to the recipient’s taxable income. The rate of this service charge is reduced to 1% in the following cases:
• The distribution is performed within a French tax consolidated group.
• The dividend is distributed to a French tax consolidated com pany by a company that is a resident for tax purposes in the EU or European Economic Area (EEA) (provided that the EEA country has entered into a treaty with France that includes a mutual assistance provision) and the latter company could be part of the French tax consolidated group if it were subject to corporate income tax in France.
• The dividend is distributed to a French company that is not part of a French tax consolidated group by a company that is resident for tax purposes in the EU or the EEA (provided that the EEA country has entered into a treaty with France that includes a mutual assistance provision) if both of the following condi tions are satisfied:
Both companies could be part of the same French tax con solidated group if the distributing company was subject to corporate income tax in France.
The fact that the French beneficiary company is not tax consolidated does not result from the mere absence of an option for the French tax consolidation regime while that option was technically possible.
The parent-subsidiary regime does not apply to the following:
• Profit distributions that are deductible from the distributing company’s taxable income
• Dividends distributed within an arrangement or a series of ar rangements, which have been put into place for the main purpose, or one of the main purposes, of obtaining a tax advantage contrary to the object or purpose of the participation exemption regime, are not genuine having regard to all relevant facts and circumstances (that is, not put into place for valid commercial reasons that reflect economic reality)
• Dividends received from a subsidiary established in an uncoop erative country (as defined in Article 238-0 A of the French Tax Code; see Section E), unless the parent company demonstrates that the subsidiary’s activities are real and do not aim to localize revenues in an uncooperative country
The parent-subsidiary regime applies if the recipient holds at least 5% of the share capital of the distributing company for at least two years.
Dividends that cannot benefit from the parent-subsidiary regime are exempt from corporation income tax up to 99% of the amount of the dividend in the following cases:
• The distribution is performed within a French tax consolidated group (the exemption does not apply the first financial year in which the distributing company is part of the group).
• The dividend is distributed to a French tax consolidated com pany by a company that is a resident for tax purposes in the EU or EEA (provided that the EEA country has entered into a treaty with France that includes a mutual assistance provision) and the latter company could have been part of the French tax consolidated group if it were subject to corporate income tax in France (the exemption does not apply the first financial year during which this condition is fulfilled).
• The dividend is distributed to a French company that is not part of a French tax consolidated group by a company that is resident for tax purposes in the EU or EEA (provided that the EEA country has entered into a tax treaty with France that includes a mutual assistance provision) if both of the following condi tions are satisfied:
Both companies could be part of the same French tax con solidated group if the distributing company was subject to corporate income tax in France.
The fact that the French beneficiary company is not tax consolidated does not result from the mere absence of an option for the French tax consolidation regime while that option was technically possible.
In general, a 25% withholding tax is imposed on dividends paid to nonresident entities (12.8% for nonresident individuals). The withholding tax rate is increased to 75% for distributed profits paid into uncooperative states (see Section E), unless it is dem onstrated that these distributions do not aim to localize revenues in an uncooperative state.
This tax may be reduced or eliminated by tax treaties. In addition, under the EU Parent-Subsidiary Directive, dividends distributed by French subsidiaries to EU parent companies are exempt from withholding tax, if, among other conditions, the recipient holds 10% or more of the shares of the subsidiary for at least two years (the 10% threshold is lowered to 5% if the effective beneficiary
cannot credit the French withholding tax in its country of resi dence).
Furthermore, a nonresident entity receiving dividends subject to withholding tax may benefit from a deferral of this withholding tax if, among other conditions, the entity is in a tax-loss position. In addition, for payments made after 1 January 2022 and under specific conditions, beneficiaries that are not able to offset the French withholding tax against their local corporate income tax liability may claim a refund of the portion exceeding the taxation that would have been due in France on the income, taking into account the corresponding expenses directly incurred to generate or retain the revenue that would have been tax deductible if the beneficiary had been located in France.
The withholding tax no longer applies to profits derived from stock, interests or assimilated shares distributed to collective in vestment vehicles (CIVs) created under foreign law and located in an EU member state or in a state that has signed a treaty with France that includes an administrative assistance provision aimed at combating tax fraud. However, to benefit from the withholding tax exemption, foreign CIVs must meet the same definition as French CIVs, and the content and actual implementation of the administrative assistance provisions must effectively allow the French tax authorities to obtain from the foreign tax authorities the information needed to verify this condition. A 15% withhold ing tax applies to distributions of income exempt from corporate income tax that are made by French real estate investment trusts (so-called SIICs and SPPICAVs) to French or foreign CIVs.
Withholding taxes on interest and royalties. Under French domes tic law, withholding tax is no longer imposed on interest paid to nonresidents. However, a 75% domestic withholding tax is im posed on interest on qualifying borrowings paid into uncoopera tive states (see Section E), unless it is demonstrated that the corresponding operations do not aim to localize revenues in the uncooperative states.
A 25% withholding tax is imposed on royalties and certain fees paid to nonresidents.
However, as a result of the implementation of EU Directive 2003/49/EC, withholding tax on interest and qualifying royalties paid between “associated companies” subject to corporate income tax of different EU member states was abolished. A company is an “associated company” of a second company if any of the fol lowing conditions is satisfied:
• The first company has maintained a direct minimum holding of 25% in the capital of the second company for at least two years at the time of the payment or commits itself to maintain such holding for a two-year period.
• The second company has maintained a direct minimum holding of 25% in the capital of the first company for at least two years or commits itself to maintain the holding for the two-year period.
• A third company has maintained a direct minimum holding of 25% in the capital of both the first and second companies for at least two years or commits itself to maintain such holding for a two-year period.
In these three situations, if the company chooses to undertake to keep the shares for at least two years, it must appoint a tax representative in France who would retrospectively pay the withholding tax if the shares are sold before the end of the two-year period.
Domestic withholding tax on royalties may be reduced or elimi nated by tax treaties.
Furthermore, a nonresident entity receiving royalties and certain fees subject to withholding tax may benefit from a deferral of this withholding tax if the entity is in a tax-loss position and the entity is located in an EU member state, or in another state that is part of the EEA agreement and is not uncooperative (see Section E) and that has concluded with France an agreement with an administrative assistance clause for the prevention of fraud and tax evasion, as well as an agreement with a mutual assistance clause for tax collection that has a similar scope as the EU direc tive.
In addition, for payments made after 1 January 2022 and under specific conditions, the withholding tax on royalties and fees for the provision of certain services is computed based on the gross amount of the sums paid, minus a 10% allowance. Under some conditions, beneficiaries that are not able to offset the French withholding tax against their local corporate income tax liability may claim a refund of the portion exceeding the taxation that would have been due in France on the income, taking into account the corresponding expenses directly incurred to generate or retain the revenue that would have been tax deductible if the beneficiary had been located in France.
Foreign tax relief. In general, income subject to foreign tax and not exempt from French tax under the territoriality principle is taxable. However, most tax treaties provide for a tax credit that generally corresponds to withholding taxes on passive income. Loss-making companies cannot use the tax credit, and they are not allowed to deduct the underlying foreign tax (the withholding tax levied on foreign-source income, which gives right to a tax credit under the double tax treaty).
C. Determination of trading income
General. The assessment is based on financial statements prepared according to French generally accepted accounting principles, subject to certain adjustments.
Deductibility of interest. In general, interest payments are fully deductible. However, certain restrictions are imposed.
Interest accrued by a French entity with respect to loans from its direct shareholders may be deducted from the borrower’s taxable income only if the following two conditions are satisfied:
• The share capital of the borrower is fully paid-up.
• The interest rate does not exceed the average interest rate on loans with an initial duration of more than two years granted by banks to French companies.
Effective for financial years beginning on or after 1 January 2020, the deduction of interest and financial expenses may be limited by two main rules.
First, related-party interest is tax-deductible only if it meets an arm’s-length test. Under this test, the interest rate is capped at the higher of the following two rates:
• The average annual interest rate on loans granted by financial institutions that carry a floating rate and have a minimum term of two years
• The interest rate at which the company could have borrowed from any unrelated financial institution, such as a bank, in similar circumstances (that is, the market rate)
The portion of interest that exceeds the higher of the above two thresholds is not tax-deductible and must be added back to the company’s taxable income for the relevant financial year (this portion is also considered to be distributed income).
Second, the net financial expenses incurred during a financial year (that is, the financial expenses reduced by financial income) are deductible from the taxable income of a company only to the extent that they do not exceed the higher of the two following thresholds:
• EUR3 million
• 30% of the adjusted taxable income of the company
For purposes of the above rule, financial expenses (or income), as defined, include, but are not limited to, any amounts that are accrued in remuneration for monies put at the disposal of the com pany (or by the company to another party). They include, but are not limited to, the following:
• Payments under profit participating loans
• Imputed interest on instruments such as convertible bonds
• Amounts under alternative financing arrangements
• Notional interest amounts under derivative instruments or hedging arrangements related to an entity’s borrowings
• Certain foreign-exchange gains and losses on borrowings and instruments connected with the raising of finance
• Guarantee fees for financing arrangements, arrangement fees and similar costs related to the borrowing of funds
The adjusted taxable income corresponds to the taxable income before the offset of tax losses and without taking into consider ation net financial expenses and, to some extent, depreciation, provisions, and capital gains and losses. Seventy-five percent of the net financial expenses exceeding the threshold is tax deductible, provided that either of the following circumstances exist:
• The equity-to-asset ratio of the company at least equals, or is not lower by more than two percentage points, the equity-toasset ratio of the consolidated group to which it belongs.
• The company is a stand-alone company (it does not belong to a consolidated group, has no permanent establishment outside of France and is not related to any other company such as set out by Articles 2-4 of the EU Anti-Tax Avoidance Directive).
Financial expenses that are excluded from the deductible expens es of a given fiscal year can be carried forward indefinitely (subject to the abovementioned limitations). If, for a given financial year, a company does not fully utilize its deduction capacity (that is, the amount of net financial expenses is lower than the thresholds mentioned above), the unused portion of deduction
capacity, which equals the positive difference between the appli cable thresholds and the net financial expenses, can be carried forward to the five following financial years. However, this deduction capacity carryforward cannot be used to deduct nonde ductible interest expenses that have been carried forward. The carryforward of nondeductible expenses and the carryforward of unused deduction capacity are ruled out if the company benefited from the additional 75% deduction for stand-alone companies.
If the company exceeds a specific 1.5:1 debt-to-equity ratio (for this ratio, the debt is the amount of debt with related entities) and cannot demonstrate that its debt-to-equity ratio is not higher by more than two percentage points than the debt-to-equity ratio of the consolidated group to which it belongs, restrictive rules apply. A portion of the net financial expenses, determined by application of the following ratio to the net financial expenses, is subject to the regular threshold (EUR3 million or 30% of the adjusted taxable income of the company):
Average amount of indebtedness to unrelated parties + (1.5 x equity)
Average amount of indebtedness
The remaining portion of the net financial expenses is tax deductible only within the limit of the higher of the two following strengthened thresholds:
• EUR1 million
• 10% of the abovementioned adjusted taxable income
In case of thin-capitalization, the safe-harbor rule that allows for the additional deduction of 75% of the net financial expenses exceeding the threshold does not apply. The portion of net finan cial expenses that could not be deducted by application of the strengthened threshold can only benefit from the carryforward up to one-third of its amount, and the exceeding portion of the de duction capacity cannot be carried forward.
For a tax-consolidated group, the limitation rule based on a por tion of the adjusted taxable income applies at the level of the group.
Inventories. Inventory is normally valued at the lower of cost or market value. Cost must be determined under a weighted average cost price method. A first-in, first-out (FIFO) basis is also gener ally acceptable, but a last-in, first-out (LIFO) basis is not permit ted.
Reserves. In determining accounting profit, companies must book certain reserves, such as reserves for a decrease in the value of assets, risk of loss or expenses. These reserves are normally de ductible for tax purposes. In addition, the law provides for the deduction of special reserves.
Capital allowances. In general, assets are depreciated using the straight-line method. However, new qualifying industrial assets are generally depreciated using the declining-balance method.
Depreciable assets composed of various parts with different char acteristics must be depreciated on a separate basis (these assets
must be split into a principal component or structure on the one hand and into additional components on the other hand). The depreciable amount of each asset must be spread out over its likely useful life for the company, which corresponds to the time period during which the company may expect to derive a profit from it. The depreciation method applied to each asset (straightline method or accelerated method) must also be consistent with the pace at which the company expects to derive a profit from the asset.
Periodic assessment of the residual value of each component must be conducted to establish a (non-tax deductible) provision for impairment if needed.
For tax purposes, the depreciation of assets that have not been split into components and the depreciation of the asset’s principal structure that has been split into components can be spread out over the useful life commonly accepted in business practices. This rule does not apply to buildings acquired by real estate investment companies. The following are some of the acceptable straight-line rates.
Asset Rate (%)
Commercial buildings 2 to 5
Industrial buildings 5 Office equipment 10 to 20 Motor vehicles 20 to 25 Plant and machinery 5 to 10*
* These are the general rates. Alternatively, new plant and machinery may be depreciated using the declining-balance method at rates generally ranging from 12.5% to 50%.
Certain specified assets may be depreciated using accelerated depreciation methods. Land and works of art are not depreciable. Intangible assets are depreciable if the company can anticipate that the profits derived from the assets will end at a fixed date. In general, goodwill is not depreciable.
The amortization of goodwill is nondeductible for tax purposes. However, as a temporary measure, companies may deduct for tax purposes the amortization made in accordance with French gen erally accepted accounting principles (GAAP) for goodwill acquired between 1 January 2022 and 31 December 2025.
Relief for tax losses. Losses may be carried forward indefinitely. However, the amount of losses used in a given year may not ex ceed EUR1 million plus 50% of the taxable profit above that amount for such financial year.
In addition, enterprises subject to corporate tax may carry back losses against undistributed profits from the prior financial year. The carryback results in a credit equal to the loss multiplied by the current corporate tax rate, but losses carried back may not exceed EUR1 million. The credit may be used to reduce corpo rate income tax payable during the following five years with the balance being refunded at the end of the fifth year.
A significant change in the company’s activity, particularly an addition or a termination of a business that infers a decrease of
50% or more of either the revenue or the average headcount and fixed assets, may jeopardize the loss carryover and carryback.
Groups of companies. Related companies subject to corporate tax may elect to form a tax-consolidated group. Under the taxconsolidation regime, the parent company files a consolidated return, thereby allowing the offset of losses of one group entity against the profits of related companies. The parent company then pays tax based on the net taxable income of companies included in the consolidated group, after certain adjustments for intragroup provisions are made; in particular, intragroup provisions for bad and doubtful debts are neutralized.
If a company is acquired from a shareholder controlling the group and becomes a member of the tax-consolidated group, the amendment Charasse provides that an amount of the financing expenses of the group must be added back to the consolidated income within a nine-year period starting with the purchasing year. This amount is calculated as follows:
Group financing expenses x Acquisition price of the shares
Average amount of the group’s debt
The group may include the French subsidiaries in which the par ent has a direct or indirect shareholding of at least 95% and for which the parent company has elected tax consolidation.
A French company or permanent establishment is allowed to form a French tax consolidated group with other French companies or permanent establishments if all are owned at 95% or more by a foreign parent company or permanent establishment is allowed that is subject to a tax equivalent to French corporate income tax in another EU country or EEA country (“horizontal tax consoli dation”). The 95% ownership test can be met directly, or indi rectly, through intermediate companies or permanent establishments that are all subject to tax in an EU/EEA country or through other French consolidated companies.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax Rate (%)
Value-added tax 2.1/5.5/10/20
Territorial Economic Contribution; capped to a certain amount of the value added by the company; maximum rate 2 Social security contributions, on gross salary (approximate percentages); paid by
Employer 40 to 45
Employee 20 to 23
General social security tax (contribution sociale généralisée, or CSG) on active income 9.2
General social security tax on patrimonial and financial income (for example, income from real estate and securities) 9.2 Social debt repayment tax (contribution remboursement de la dette sociale, or CRDS), on all income 0.5
Nature of tax Rate (%)
Special social security tax (prélèvement de solidarité) 7.5
Registration duty
On sales of shares in stock companies (including sociétés anonymes, sociétés par actions simplifiées and sociétés en commandites par actions); intragroup transfers are exempt 0.1
On sales of shares of private limited liability companies (sociétés à responsabilité limitée, or SARLs) and interests in general partnerships (sociétés en nom collectif, or SNCs); intragroup transfers are exempt 3
On sales of goodwill 3 to 5
On sales of professional premises, housing, businesses and shares of companies whose assets primarily consist of real estate 5 to 6
E. Miscellaneous matters
Foreign-exchange controls. As a general rule, standard foreign investments are free for the most part. However, some foreign investments must be declared for statistics purposes. In addition, foreign investments are subject to a prior authorization procedure of the French Minister of the Economy when they concern stra tegic sectors or sectors deemed sensitive for the defense of national interests. French rules in this area have been strengthened several times in recent years; the scope of application of the control mechanism was extended and sanctions applicable in the event of a breach were reinforced.
Payments to residents of tax havens or to uncooperative states or territories. Under Article 238 A of the French Tax Code, interest, royalties and other remuneration paid to a recipient established in a tax haven or on a bank account located in a tax haven are deemed to be fictitious and not at arm’s length. As a result, to deduct the amount paid, the French entity must prove that the operation is effective (that it effectively compensates executed services) and is at arm’s length. For purposes of the above rules, a privileged tax regime is a regime under which the effective tax paid is 40% lower than the tax that would be paid in France in similar situations.
If these payments are made to a recipient established in an uncooperative country or on a bank account located in an uncoopera tive country, the French entity must also prove that the operation’s principal aim is not to locate the payment in that country. The list of the uncooperative countries is regularly published by the French tax authorities.
Anti-hybrid rules. For financial years beginning on or after 1 January 2020, the anti-hybrid rules transposed from the EU Anti-Tax Avoidance Directive apply. The rules target deduction/ non-inclusion or double deduction mismatches resulting from hybrid entities or instruments, dual-resident companies or com panies with permanent establishments. The rules also cover imported mismatches (the French corporate taxpayer is not directly a party to a targeted mismatch, but a deductible payment is com pensated within a wider arrangement with a payment that is part
of a mismatch) and structured arrangements (the benefit of a mismatch is embedded within an arrangement concluded by the French corporate taxpayer, even with a non-associated party).
In deduction/non-inclusion cases, the deduction is disallowed to the payer that is tax resident in France or, for a payee resident in France, the income is taxed if the deduction is not neutralized in the payer jurisdiction. In double deduction cases, the deduction is disallowed if the investor (anyone other than the payer who ben efits from the deduction) is tax resident in France or, for a payer tax resident in France, the deduction is disallowed if the deduc tion is not disallowed in the investor jurisdiction. Specific rules apply for other types of mismatches.
Transfer pricing. French entities controlled by, or controlling, enti ties established outside France are taxable in France on any prof its transferred directly or indirectly to the entity located abroad through an increase or decrease in purchase or sale prices or by any other means.
In the context of a tax audit, certain companies (companies with total net sales before taxes or total gross assets equal to or greater than EUR400 million, subsidiaries owned at more than 50% by such a company, parent companies that hold more than 50% of such a company and members of a French tax consoli dated group that includes at least one company that meets these criteria) must provide their transfer-pricing documentation on the tax inspector’s request or within 30 days (Article L 13AA of the French Tax Procedure Code). The transfer-pricing documentation includes the list of information recommended by the Organisation for Economic Co-operation and Development (OECD) for the Master File (Annex I to the new Chapter V of the OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations) and the Local File (Annex II to the afore mentioned Chapter V). If the company fails to provide the docu mentation in due time, a penalty of up to either 5% of the transfer-pricing reassessment or 0.5% of the volume of the transactions carried out with related enterprises is applied, with a minimum of EUR10,000 per financial year under audit.
In addition, certain companies (a company with total net sales before taxes or total gross assets equal to or greater than EUR50 million, a subsidiary owned at more than 50% by such a company, a parent company that holds more than 50% of such a company and members of a French tax consolidated group that includes at least one company that meets these criteria) are re quired to file a “light” transfer-pricing statement within six months after the filing deadline of the tax return (Article 223 quinquies B of the French Tax Code). The transfer-pricing state ment includes the following:
• General information about the group (main activities, compa nies related to the reporting entity, intangible assets held by the group and used by the reporting entity, and general description of the transfer-pricing policy applied by the group)
• Specific information for intragroup transactions
• Disclosure of change in the activity of the entity or in the transfer-pricing method being applied
Although the penalty for a not filing this transfer-pricing state ment is minimal (that is, EUR150), taxpayers failing to file the report are likely to be scrutinized by the French tax authorities. Country-by-Country Reporting. In accordance with the OECD final report on Transfer Pricing Documentation and Country-byCountry Reporting (CbCR) Action 13 and EU Directive 2011/16/ EU regarding mandatory automatic exchange of information in the field of taxation, certain companies that are members of a multinational group with a consolidated turnover of at least EUR750 million are subject to a CbCR obligation (Article 223 quinquies C of the French Tax Code). The report must be filed within 12 months after the closing date of the financial year. Noncompliant companies may be subject to a penalty of up to EUR100,000.
Controlled foreign companies. Under Section 209 B of the French Tax Code, if French companies subject to corporate income tax in France have a foreign branch or if they hold, directly or indirectly, an interest (shareholding, voting rights or share in the profits) of at least 50% in any type of structure benefiting from a privileged tax regime in its home country (the shareholding threshold is reduced to 5% in certain situations), the profits of this foreign entity or enterprise are subject to corporate income tax in France. If the foreign profits have been realized by a legal entity, they are taxed as a deemed distribution in the hands of the French company. If the profits have been realized by an enter prise (an establishment or a branch), these profits are taxed as profits of the French company if the tax treaty between France and the relevant foreign state allows the application of Section 209 B of the French Tax Code.
For the purpose of the above rules, a privileged tax regime is a regime under which the effective tax paid is 40% lower than the tax that would be paid in France in similar situations (such a for eign company is known as a controlled foreign company [CFC]). Tax paid by a CFC in its home country may be credited against French corporate income tax.
CFC rules do not apply to profits derived from entities established in an EU member state unless the French tax authorities establish that the use of the foreign entity is an artificial scheme that is driven solely by French tax avoidance purposes.
Similarly, the CFC rules do not apply if the profits of the foreign entity are derived from an activity effectively performed in the country of establishment. The concerned company must demon strate that the establishment of the subsidiary in a tax-favorable jurisdiction has mainly a non-tax purpose and effect by proving that the subsidiary mainly carries out an actual industrial or com mercial activity.
Debt-to-equity rules. For a discussion on the restrictions imposed on the deductibility of interest payments, see Section C.
Headquarters and logistics centers. The French tax authorities issue rulings that grant special tax treatment to headquarters companies and logistics centers companies. These companies are subject to corporate income tax at the normal rate on a tax base corresponding generally to 6% to 10% of annual operating
expenses, depending on the company’s size, functions assumed and risks borne. In addition, certain employee allowances are exempt from income tax.
Reorganizations. On election by the companies involved, merg ers, spin-offs, split-offs and dissolutions without liquidation may qualify for a special rollover regime.
Tax credits for research and development. To encourage invest ments in R&D, the tax credit for R&D expenditure equals 30% of qualifying expenses related to R&D operations up to EUR100 million, and 5% for such expenses above EUR100 million.
A new tax credit has been designed to promote cooperation between private corporations and public research bodies and is based on R&D expenses incurred as part of research cooperation agreements concluded between 1 January 2022 and 31 December 2025. The tax credit for cooperative research amounts to 40% (or 50% for small and medium-sized enterprises) of the eligible ex penses up to EUR6 million per year (the expenses cannot simul taneously be used for the computation of the classic R&D tax credit).
Tax audits. All companies must maintain their accounting records in an electronic form when French tax authorities carry out a tax audit.
F. Treaty withholding tax rates
The following table is for illustrative purposes only.
Dividends
Interest (e)(g) Royalties (e) % % %
Albania 5/15 10 5 Algeria 5/15 0/10 5/10
Andorra 5/15 0/5 0/5
Argentina 15 20 18 Armenia 5/15 0/10 5/10 Australia 0/5/15 0/10 5 Austria 0/15 (a) 0 0 Azerbaijan 10 10 5/10 Bahrain 0 0 0 Bangladesh 10/15 10 10 Belarus (c) 15 0/10 0 Belgium 0/10/15 (a) 15 0 Benin (j) (j) 0 Bolivia (h) 10/15 0/15 0/15 Bosnia and Herzegovina (f) 5/15 0 0
Botswana 5/12 0/10 10 Brazil 15 10/15 10/15/25 Bulgaria 5/15 (a) 0 5 Burkina Faso (j) (j) 0 Cameroon 15 0/15 0/7.5/15 Canada (b) 5/15 0/10 0/10 Central African Republic (j) (j) 0 Chile (h) 15 4/5/10 2/5/10
Dividends Interest (e)(g) Royalties (e) % % %
China Mainland (d) 5/10 10 10
Colombia (l) 5/15 0/10 10
Congo (Republic of) 15/20 0 15
Côte d’Ivoire 15 0/15 10
Croatia 0/15 (a) 0 0
Cyprus 10/15 (a) 0/10 0/5
Czech Republic 0/10 (a) 0 0/5/10
Ecuador 15 10/15 15
Egypt (h) 0 15 0/15
Estonia (h) 5/15 (a) 0/10 0/5/10
Ethiopia (h) 5/10 0/5 5/7.5
Finland 0 (a) 0/10 0
Gabon 15 0/10 0/10
Georgia 0/5/10 0 0
Germany 0/15 (a) 0 0
Ghana 5/15 10 10 Greece (a) (j) 0/12 5 Guinea 15 0/10 0/10
Hong Kong 10 10 10 Hungary 5/15 (a) 0 0 Iceland 5/15 0 0
India (h) 5/10 0/10 0/10/20
Indonesia 10/15 10/15 10
Iran 15/20 15 0/10
Ireland 10/15 (a) 0 0
Israel 5/15 5/10 0/10
Italy 5/15 (a) 0/10 0/5
Jamaica 10/15 10 10
Japan 0/5/10 0/10 0
Jordan 5/15 0/15 5/15/25
Kazakhstan (h) 5/10/15 0/10 10 Kenya 10 12 10
Korea (South) 10/15 0/10 10
Kuwait 0 0 0
Kyrgyzstan (c) 15 0/10 0
Latvia (h) 5/15 (a) 5/10 0/5/10
Lebanon 0 0 (j)
Libya (h) 5/10 0 0
Lithuania (h) 5/15 (a) 0/10 0/5/10
Luxembourg 0/15 (a) 0 5
Madagascar 15/25 0/15 10/15
Malawi 10/— (k) (j) 0/— (k)
Malaysia 5/15 0/15 10 Mali (j) (j) 0/— (k)
Malta 0/15 (a) 0/5 0/10
Mauritania (j) (j) 0/— (k)
Mauritius 5/15 0/— (k) 0/15
Mexico (h) 0/5/15 0/5/10 0/10
Moldova (c) 15 0/10 0
Monaco (j) (j) (j)
Mongolia 5/15 10 0/5
Montenegro (f) 5/15 0 0
Morocco 0/15 10/15 5/10/— (k)
Namibia 5/15 10 0/10
Netherlands 5/15 (a) 10 0
New Caledonia
Dividends Interest (e)(g) Royalties (e) % % %
5/15 0 0/10
New Zealand 15 0/10 10 Niger (j) (j) 0
Nigeria 12.5/15 12.5 12.5
North Macedonia 0/15 0 0
Norway 0/15 0 0 Oman 0 0 0/7
Pakistan 10/15 10 10
Panama 5/15 5 5 Philippines 10/15 0/15 15
Poland 5/15 (a) 0 0/10
Portugal 15 (a) 10/12 5 Qatar 0 0 0
Romania 10 (a) 10 10
Russian Federation 5/10/15 0 0 St. Martin 0/15 0/10 0 St. Pierre and Miquelon 5/15 0 0/10
Saudi Arabia 0 0 0
Senegal 15 0/15 0/15/— (k)
Singapore 5/15 0/10 0/— (k)
Slovak Republic 10 (a) 0 0/5
Slovenia 0/15 (a) 0/5 0/5
South Africa 5/15 0 0 Spain 0/15 (a) 0/10 0/5 Sri Lanka (j) 0/10 0/10 Sweden 0/15 (a) 0 0 Switzerland 0/15 0 5 Syria 0/15 0/10 15 Taiwan 10 0/10 10 Thailand 15/20/— (k) 3/10/— (k) 0/5/15 Togo (j) (j) 0 Trinidad and Tobago 10/15 10 0/10 Tunisia (j) 12 0/5/15/20 Turkey 15/20 15 10
Turkmenistan (c) 15 0/10 0 Ukraine 0/5/15 0/2/10 0/10
United Arab Emirates 0 0 0
United Kingdom 0/15 (a) 0 0 United States 0/5/15 0 0 USSR (c) 15 0/10 0 Uzbekistan (h) 5/8 0/5 0 Venezuela 0/5/15 0/5 5 Vietnam (h) 5/10 0 5/10
Yugoslavia (f) 5/15 0 0 Zambia 10/— (k) (j) 0 Zimbabwe 10/15 10 10 Non-treaty jurisdictions 0/15/26.5/75 (i) 0/75 (i) 0/26.5/75 (i)
(a) Dividends paid by French companies to parent companies located in other EU member states are exempt from withholding tax if the parent company makes a commitment to hold at least 10% of the distributing company for an uninterrupted period of at least two years (the 10% threshold is lowered to 5% if the effective beneficiary cannot credit the French withholding tax in its country of residence).
(b) Withholding tax rates of 5%/15% (dividends), 0%/10% (interest) and 0%/10% (royalties) apply with respect to Quebec.
(c) France has agreed with Turkmenistan to apply the France-USSR tax treaty. France applies the France-USSR tax treaty to Belarus, Kyrgyzstan and Moldova.
(d) The tax treaty between France and China Mainland does not apply to Hong Kong.
(e) As a result of the implementation of EU Directive 2003/49/EC, withholding tax on interest and royalties paid between associated companies of different EU states is abolished if certain conditions are met (see Section B).
(f) France is honoring the France-Yugoslavia treaty with respect to Bosnia and Herzegovina, Montenegro and Serbia.
(g) The French domestic law applies. As a result, the rate is 0% under normal circumstances. The rates listed for interest in the table are the treaty rates.
(h) The general rates under the treaty are reduced in practice according to a “most-favored-nation” clause. The rates indicated are those resulting from the application of the “most-favored-nation” clause.
(i) The 75% rate applies only to payments made into uncooperative countries (see Section E).
(j) The domestic rate applies.
(k) The dash signifies the domestic rate.
(l) A tax treaty signed on 25 June 2015 between France and Colombia entered into force on 1 January 2022. The tax treaty applies to withholding taxes on revenues paid on or after 1 January 2023.