France: Finance Bill 2020 adopted by the Parliament and officially published
Clearstream Banking1 informs customers that further to the approval of the Finance bill for 2020 by the French Parliament on 19 December 2019, it was published in the Official Journal on 29 December 2019 through Law N°2019-1479 dated 28 December 2019.
The main tax measures are:
- the decrease of the standard withholding tax rate applicable to dividend payments from 30% to 28%.
This rate will also be applicable to capital gains realised by non-resident investors from the disposal of a substantial shareholding in French Companies. - the temporary tax refund and tax deferral for non-resident companies in loss making situation, under certain conditions.
- the exemption from withholding tax of companies in compulsory liquidation, applicable to dividend distributions is extended to all other types of income and profits subject to tax, under certain conditions.
Impact on customers
The new default tax rate of 28 % will apply to all dividends paid to undisclosed beneficial owners from 1 January 2020. This rate can be reduced through the application of a double taxation treaty or domestic law provisions. The default tax rate of 12.8% applicable to non-resident individuals remains the same and is still applicable to dividends paid from 1 January 2018. The taxation procedure currently applicable and available in our Market Taxation Guide-France remains unchanged.
The other provisions of this new law are not part of Clearstream Banking’s service offering, that is:
- the application of 28% default tax rate to capital gains gains realised by non-resident investors from the disposal of a substantial shareholding in French companies;
- the temporary tax refund and tax deferral for non-resident companies in loss making situation;
- the exemption from withholding tax of companies in compulsory liquidation.
Customers interested in these new dispositions of the law should seek the advice of their own tax advisors.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or your Relationship Officer.
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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, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.