Tuesday, 8 August 2017

Court decisions provide opportunities to claim 3% French distribution tax refunds

In a decision dated May 17, 2017, the European Court of Justice decided that a French company’s liability for the 3% tax on distributions received from its subsidiaries established in another EU Member State is incompatible with the Parent-Subsidiary directive in that it creates double taxation on profits realized within the EU.

These decisions provide an additional opportunity to claim refunds of the 3% tax paid before December 31, 2016, by French companies at least 95%-owned by MNEs that are subject to CIT or by French companies on redistribution of dividends received from their EU subsidiaries subject to CIT.

The ECJ’s decision (an anticipated development) is important in disputes relating to the 3% contribution, but is only one step. The litigation likely will continue on the basis of constitutional law issues.

Source & more info: PwC