France: New withholding tax rate applicable as of 1 January 2022 - reminder
LuxCSD1 would like to remind customers of the decrease of withholding tax rate from 26.5% to 25% as of 1 January 2022. This decrease was initially introduced by the Financial Law for 2018, applicable following publication of N° 2019-1479 dated 28 December 2019, resulting from the adoption of the Finance bill for 2020.
Effective
1 January 2022
the following default withholding tax rates, will apply to French-sourced dividends paid to non-resident beneficiaries:
- 25% to legal entities and undisclosed recipients. Until 31 December 2021, the applicable rate is 26.5%. This default tax rate may be reduced or eliminated under an applicable double taxation treaty agreement or through domestic law provisions.
- 12.8% to disclosed foreign individuals. This rate is unchanged compared to 2021. This default tax rate may be reduced or eliminated under an applicable double taxation treaty agreement.
Impact on customers
The new default withholding tax rate of 25% will apply to all French-sourced dividends paid to undisclosed beneficial owners as of 1 January 2022.
The current applicable procedure for relief at source, quick refund or standard refund remain unchanged.
However, customers must consider using the correct default tax rate according to their status and the year of payment of the dividend in their tax certification when relevant.
For standard refund, dividend payments processed until 31 December 2019 were taxed at the default tax rate of 30%, those processed until 31 December 2020 were taxed at the default tax rate of 28% and those processed until 31 December 2021 were taxed at the default tax rate of 26.5%. These rates must be considered as the basis for a tax reclaim.
For further details, please refer to the Market Taxation Guide - France.
Further information
For further information, please contact the LuxCSD Tax Help Desk or LuxCSD Client Services or your Relationship Officer.
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1. LuxCSD refers to LuxCSD S.A., registered office at 42, Avenue J.F. Kennedy, L-1855 Luxembourg, registered with the Luxembourg Trade and Companies Register under number B-154.449.