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Update News - September 2009 - France

Measures that would further support France’s anti-tax evasion and anti-tax haven provisions are being considered by the Cabinet. For instance, the following measures are considered.

• A 50% withholding tax on interest, dividends and royalties paid to tax haven residents

• Non-deductibility of certain payments to tax haven residents unless the payer justifies the genuine and reasonable nature of the payment

• The settlement of the participation exemption would not be applicable on dividends received from tax haven

• The controlled foreign company rules will be restricted in relation to the minimum participation threshold, or the foreign low-tax description, or the economic activity protection test, or all.