France: Proposed increase of withholding tax for EU/EEA-DTT resident individuals
Reference
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On 16 November 2011, the Council of Ministers adopted the Financial Law Project for 2011.
The Project includes a proposal to increase, effective 1 January 2012, the dividend withholding tax rate for EU/EEA-DTT resident individuals from 19% to 24%.
The current standard rate of withholding tax on certain French dividends paid to individual beneficial owners that are residents of European Union (EU) member states, Iceland or Norway1 is 19%.
In practice, however, the proposed 24% rate would apply to beneficial owners that are individuals resident in the following countries only:
- Greece, where the treaty rate for withholding tax on dividends is 25%; and
- Denmark, where the tax treaty expired as of 1 January 2009.
Other countries in the relevant category have a lower rate of withholding tax through a DTT with France.
The details of this proposal are not yet finalised and may still be subject to change. We will provide more information as it becomes available.