Press Room

June 30, 2017

From France: 3% Contribution on Dividends - The European Court of Justice Censure


Denis Fontaine-Besset - STC Partners, A Member Firm of Andersen Global


 

The following is an update on the October 2016 postcard on 3% distribution taxes.

The long awaited decision of the European Court of Justice (ECJ) expected to rule on the compliance of the 3% additional corporate income tax on distribution contribution with European rules on dividend taxation was released on May 17, 2017. The decision made, and supported by a number of French multinational groups, confirms the non-compliance of this contribution with the limitation on taxation of dividends as provided for in the parent-subsidiary directive in case of the re-distribution of dividends from dividends received from qualifying European subsidiaries.

The new government nominated after the recent presidential election will have the delicate task to provide for substitution state resources in order to replace this loss in taxation income evaluated to several billions of Euros.

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