SubChapter M Tax: Foreign withholding issues - Deloitte | France Tax Alert - 8 July 2010 | International Tax

SubChapter M Tax: Foreign withholding issues - Deloitte | France Tax Alert - 8 July 2010 | International Tax: "Deloitte | France Tax Alert - 8 July 2010 | International Tax: 'The French Administrative Lower Court of Paris ruled on 22 April 2010 that the withholding tax levied on French-source dividends paid to an Irish UCIT violated the free movement of capital principle in the Treaty of the Functioning of the EU and EEA. The French tax authorities have four months to lodge an appeal against the decision (until August 2010), although they have not yet done so.

Under French law, dividends paid by a French company to a non-French UCIT are subject to a 25% withholding tax, whereas dividends paid by a French company to a French UCIT are exempt from taxation in France (i.e. no withholding tax and no corporate income tax at the level of the UCIT). In addition, the French tax authorities take the position that tax treaties do not apply to UCITs, unless specific provisions are included in a treaty (see, for example, France’s treaties with Germany, Spain and Sweden).'"