Out-Law News

Commission refers France to CJEU over taxation of dividends


The European Commission has asked France to comply with a judgment made in 2011 by the Court of Justice of the European Union (CJEU) on the refund of tax paid in France by companies with subsidiaries in other EU countries.

France's Council of State adopted a "restrictive interpretation" of the CJEU judgment in two judgments of its own in 2012, and the Commission considers these judgments to be incompatible with EU law, it said.

France is failing to comply with the CJEU's judgment by maintaining discrimination in the taxation of dividends that originate in other EU countries, the Commission said.

France does not take into account tax that has already been paid by non-French subsidiaries, and limits the system of tax credits to one third of the dividend redistributed by a non-French subsidiary. That limit constitutes discrimination, in that companies receiving dividends from other member states are treated differently to those receiving dividends from within France, the Commission said.

France also imposes evidence requirements that restrict the right of the companies concerned to a refund, which does not comply with the 2011 CJEU judgment, the Commission said.

A letter of formal notice in 2014, and a 'reasoned opinion' in April 2016 have not been complied with, the Commission said, so it is now referring the matter to the CJEU.   

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