France: Application of tax treaty benefits to Spanish UCITs clarified by the French tax authorities
Clearstream Banking1 would like to inform customers that the French Tax Authorities (FTA) recently clarified that Spanish Undertakings for Collective Investment in Transferable Securities (UCITs) qualify as residents within the meaning of the tax treaty signed between France and Spain.
Spanish UCITS are eligible to the 15% tax treaty rate on their whole French source dividends.
Until this confirmation from the FTA, it was unclear whether Spanish UCITs could benefit from the reduced rate as foreseen in the Double Tax Treaty (DTT) signed between Spain and France on:
- The whole French source dividends; or
- Only for parts of these dividends corresponding to the rights held in these UCITS by residents of Spain and which are taxable for these residents.
It is now clarified that UCITs constituted in Spain (Instituciones de inversión colectiva ») being subject to corporate tax in Spain(« impuesto sobre Sociedades ») at a 1% rate also qualify as residents of Spain for DTT purposes and are eligible to the 15% DTT rate on their entire French source dividends.
Impact on customers
Customers claiming the benefit of the DTT on behalf of a Spanish UCIT no longer need to specify in Form 5000 (Box VII) the percentage of shares held by Spanish residents and may now benefit from a full relief at source, quick or standard refund process.
For full details on the applicable procedures and documentation to provide, please refer to our Market Taxation Guide – France.
For further information, please contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or your Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking AG customers using Creation Accounts), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.