Clearstream Banking AG, Frankfurt (CBF)
France - Equities
Relief at source - Overview
Relief at source from withholding tax on dividends is available through CBF through various procedures, for which the documentation requirements depend on the status and residency of the beneficial owner.
In all cases, if the required documentation is not provided within the deadlines, the standard rate of 30% will be applicable by default. CBF can apply for tax exemption at source according to French legislation.
Note: Beneficial owners that are residents of France for tax purposes and hold French equities through CBF can apply for tax exemption at source according to French legislation.
For residents of a Double Taxation Treaty (DTT) country - the "simplified procedure:"
On condition that the required certification, beneficial owner information and breakdowns are provided, this relief at source procedure allows for dividend payments to be made directly at the DTT rate or more to any non-resident beneficial owner that:
Resides in a country that has signed a DTT with France that provides for a tax rate lower that 30%; and
Meets the conditions laid down by the applicable DTT to obtain the benefit of the reduced withholding tax rate. Among these conditions, the distributed income paid by the company resident in France must be liable to income tax in the beneficial owner’s country of residence.
For EU/EEA-DTT resident individuals - the "21% procedure:"
Since 1 January 2008, on condition that the required certification, beneficial owner information and breakdowns are provided, this relief at source procedure allows for dividend payments to be made directly at 79% to any EU/EEA-DTT resident individuals who cannot benefit from a lower tax rate through the application of the DTT in force with France.
Note: Positions instructed must be firm: amendments will not be possible.
In practice, however, the 21% rate applies to the following beneficial owners only:
Denmark: the Danish tax treaty expired as of 1 January 2009.
Greece: the Greek treaty rate for dividends is 30%.
Liechtenstein: there is currently no tax treaty with Liechtenstein..
Other countries in the relevant category have a lower rate of withholding tax through a DTT with France.
For EU parent companies - through one of two procedures:
The Double Taxation Treaty (DTT) procedure according to the provisions stated in the relevant DTT between the country of residence of the parent company and France; or
The European 0% procedure if the EU parent company and the French subsidiary company meet the conditions stated in the European Directive 90/435/EEC of 23 July 1990.
For non-profit organisations - 15% for eligible beneficial owners:
Eligible foreign non-profit organisations must, before requesting that 15% withholding tax be applied, obtain a Non-Profit Organisations Certificate issued by the Direction des Résidents à l’Etranger et des Services Généraux (DRESG).
For tax-exempt entities:
Entities can be recognised as tax-exempt according to:
A special agreement given by the French Tax Authorities that might or might not be officially published (Journal Officiel); or
The Convention of the United Nations (1946) or the Convention of the United Nations specialised organisation (1947); or
Article 131 sexies (I or II) of the French General Tax Code.
Article 131 sexies I allows beneficiaries that are international organisations, sovereign states or central banks to be totally exempted if the three following conditions are met:
The investment must not represent a direct investment, as defined by Law N° 66-1008 of 28 December 1966 regarding financial relations with foreign countries. This condition is fulfilled provided that the equity interest in the French Company does not exceed 20%.
The securities owned must be in the registered form or must be deposited with an established credit institution in France.
The claimant is the effective beneficiary of the income.
Article 131 sexies II allows the beneficiaries that are foreign public institutions to be totally or partially exempted.
Note: As of 24 August 1995 (the date of the official instruction published by the French Tax Authorities), exemption must be requested before making the investment. In this case, a letter with all required documents must be sent to the Direction de la Legislation Fiscale (DLF) to obtain their agreement.
Equities - Overview
Who can obtain relief at source?
Relief at source - Documentation requirements
Relief at source - Deadline for receipt of documents
When is relief at source received?