TLDR: Dividends from foreign companies must be declared in France under specific rules. If they originate from a French company but are routed through a foreign entity, reduced rates or exemptions may apply with proper documentation. French tax residents must declare them, unless exemptions under international tax treaties apply. For dividends from foreign partnerships, a legal representative’s certification and proof of tax residency are required.
Declaration Obligations for Tax Residents in France
If you are a tax resident in France, you must declare dividends received from foreign companies, unless they are exempt under international tax treaties. Tax residency in France is a key requirement: you must be subject to taxation without the option for exemption in your country of residence. This obligation also applies to dividends distributed by foreign companies based in an EU or EEA member state, provided these companies are subject to tax without exemptions.
French-Source Dividends Routed Through Foreign Entities
If dividends originate from a French company but are routed through a foreign partnership, you may benefit from reduced rates or exemptions by submitting the required documentation. This includes:
- A certificate signed by the legal representative of the foreign entity, confirming your ownership percentage and the foreign state’s fiscal transparency regime for partnerships.
- Proof of your tax residency without options or exemptions.
If this documentation is not provided before the dividend payment date, the portion corresponding to your rights will be subject to withholding tax at the standard rate.
Dividends Received by Permanent Establishments in France
French-source dividends paid to a permanent establishment in France of a foreign company are not subject to withholding tax, provided they are included in the taxable results of the permanent establishment for corporate tax purposes. This preferential tax treatment applies automatically if the dividends are recorded as part of the permanent establishment’s profits and taxed in France under standard rules.
Exemptions for Foreign-Source Dividends
Foreign-source dividends may be exempt from taxation in France in specific cases, such as when they cover insurance technical reserves or are exempt under a double taxation treaty. For example, if dividends correspond to foreign securities covering foreign currency commitments and represent mandatory technical reserves calculated under French insurance law, they may be exempt.
Required Documentation
To qualify for reduced rates or exemptions on French-source dividends routed through foreign partnerships, you must submit two key documents:
- A certificate signed by the legal representative of the foreign entity, confirming your ownership percentage and the fiscal transparency regime applied to the partnership in the foreign state.
- Proof that you are subject to taxation as a resident in your country, without options or exemptions.
This documentation must be provided before the dividend payment date to avoid the application of withholding tax at the standard rate.
Deadlines and Withholding Tax Recovery
If the foreign partnership does not justify your French residency before the dividend payment date, the portion corresponding to your rights will be subject to withholding tax at the standard rate. However, if residency is proven later, the withholding tax applied can be credited or refunded under the terms of Article 199 ter of the French Tax Code (CGI).
For informational purposes only; not personalized tax advice.