Reclaiming withholding tax in France


Reclaiming withholding tax in France

Operational difficulties

Continuing along the same lines of the Aberdeen case law, the Court of Justice of the European Union (CJEU) confirmed on 10 May 2012 in their Santander decision that withholding tax levied in France on dividends paid to non-French investment funds was discriminatory.

Executive summary

  • France has finally recognised that withholding tax (WHT) charged to foreign investment funds comparable to French investment funds was discriminatory
  • Funds are entitled to 0% WHT since 17 August 2012
  • The tax authorities are yet to issue official guidelines but have communicated further details on the supporting documentation required to process a WHT reclaim to a group of investors and their advisers
  • The comparability test is still very vague which does not give much certainty to foreign funds that have or want to file a claim
  • On the other hand, the tax authorities have been very specific on the documents they require to support the claim (in the content, origin and format). The volume of paperwork and administrative complications is not for the faint hearted, but should be worth it in the end
  • Process to apply exemption at source that should have been applied from 17 August 2012 is still to be issued, which causes questions for custodians under pressure from their investors and asset managers’ clients

Performance issue 10 - January 2013

Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients. 

Performance issue 10
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