France: Certification requirements for particular foreign entities
Effective
immediately
Our custodians have provided additional clarification, obtained from the French Tax Authorities (FTA), about the certification requirements for the following foreign entities in order to obtain the benefits granted by the Double Taxation Treaty (DTT):
- Gesellschaft bürgerlichen Rechts – Partnership Agreement under the German Civil Code (German GBRs);
- UCITS, Pension funds, Charities, Foundations/Associations, Trust, partnerships etc.;
- U.S. residents.
German GBRs
According to the FTA, a German GBR is not eligible as such to benefit from a DTT rate because it does not fulfil the condition of residency foreseen by the treaty.
However, a German GBR is, in fact, a pass-through entity and as such its profits are taxed at the level of the partners and not at the level of the entity itself.
The FTA have specified that, despite the non-eligibility of a German GBR to benefit from the tax treaty, its partners may do so under the procedure applicable to foreign transparent partnerships as introduced by the Statement of Practice (SoP) 4 H-5-07 dated 29 March 2007.
Simplified procedure
In order to benefit from the treaty relief from withholding tax on French-sourced dividend income, a German GBR should provide, by the deadlines prescribed by Clearstream Banking , the following documentation:
- Form 5000 - Certificate of Residence, for each partner. For each partner, the “Profession” field of the relevant Form 5000 should contain its personal profession and not the status of the GBR.
- An original GBR Attestation, signed by the legal representative of the GBR, confirming the percentage of the rights of each associate in the GBR and the regime of tax transparency from which the GBR benefits in its country of residence. This is required in order to prove:
- That the GBR itself is transparent;
- That, in fact, it is the final beneficiaries behind the GBR who are taxed on the income received; and
- Therefore, that it is eligible to benefit from the treaty provisions.
There is no official template for the Attestation. As a result, any form under the letterhead of the GBR is accepted as long as the required information is included. The information indicated in the attestation must correspond to the data from the last general assembly. The document is required on an annual basis, issued after the last general meeting and should be valid for less than one year at pay date. - A cover letter, including the names of all the partners applying for the simplified procedure and certifying that these names are part of the relevant GBR.
- Per payment Corporate Action instruction.
- One-time Certificate of Authorisation for the Simplified Procedure. And
- Per payment Detailed List of Beneficial Owners
Furthermore, customers are reminded that, in the “declaration nominative”, the FTA informed us that the reporting should be done in the name of each partner of the GBR and not in the name of the GBR.
Standard refund
In order to apply for the refund of the withholding tax applied on French-sourced dividend income, each partner of the GBR should provide, by the deadlines prescribed by Clearstream Banking, the following documentation:
- Form 5000 - Certificate of Residence, per partner;
- Form 5001 - Calculation and Repayment of Withholding Tax on Dividends;
- The GBR Attestation;
- Letter of Request to Clearstream Banking for Reclaim of French Withholding Tax;
- A cover letter, including the names of all the partners applying for the standard refund and certifying that these names are part of the relevant GBR.
All the documentation mentioned above must be sent together with a cover letter mentioning the relevant GBR.
UCITSs, pension funds, charities, foundations/associations, trusts, partnerships etc.
As a general rule, beneficial owners for whom there is no specific provision in the DTT between their country of residence and France are considered by the FTA as not eligible for the benefits of the DTT, as they are considered as non-taxable in their home country.
However, the FTA have clarified that, if particular entities such as Undertakings for Collective Investments in Transferable Securities (UCITSs), pension funds, charities, foundations/associations, trusts, partnerships etc. are effectively subject to tax in their country of residence, then they may be eligible to benefit from a DTT, provided that, in addition to the other documentation required by Clearstream Banking for the Simplified or Standard procedure, a tax attestation issued by the local tax authorities of the beneficial owner is submitted, confirming that the beneficial owner is indeed subject to corporate tax at a normal rate on its income (including French-sourced income) for the relevant income year.
The intention of the tax attestation is to prove that the beneficial owner fulfils the residency conditions stated within the DTT.
The tax attestation remains valid for one calendar year (meaning from date of issuance (signature date) until the 31 December of the year in which it is signed).
Simplified procedure
In order to benefit from the DTT relief from withholding tax on French-sourced dividend income via the Simplified Procedure, the relevant beneficial owner should provide, by the deadlines prescribed by Clearstream Banking, the following documentation:
- Form 5000 – Certificate of Residence;
- A tax attestation, in the original, issued by the local tax authorities of the beneficial owner, confirming that the beneficial owner is indeed subject to corporate tax at a normal rate on its income (including French-sourced income) for the relevant income year;
- Per payment Corporate Action Instruction;
- One-time Certificate of Authorisation for the Simplified Procedure; and
- Per payment Detailed List of Beneficial Owners.
Standard refund
In order to apply for the refund of the withholding tax applied on French-sourced dividend income, the relevant beneficial owner should provide, by the deadlines prescribed by Clearstream Banking, the following documentation:
- Form 5000 - Certificate of Residence;
- Form 5001 - Calculation and Repayment of Withholding Tax on Dividends;
- A tax attestation, in the original, with the first standard reclaim of that fiscal year, a copy of said attestation thereafter accepted for all future reclaims during the same fiscal year;
- Letter of Request to Clearstream Banking for Reclaim of French Withholding Tax.
U.S. residents
The FTA have further clarified the following certification requirements for U.S. residents (in addition to the above-mentioned attestation, if applicable) in order to obtain the benefits granted by the DTT via the Simplified or Standard refund procedure.
Simplified procedure
For the Simplified procedure, the following documentation is required for U.S. residents:
- Certificate of Residence.
Depending on the status of the beneficial owner, the Certificate of Residence must be provided as follows:
U.S. Pension funds, Not For Profit Organisations and U.S. RICs, REITs, REMICs:
- 6166 certificate issued and certified by the IRS.
The 6166 certificate replaces the Form 5000 in this case and must confirm the legal status and the Internal Revenue Code section to which it refers as follows:- U.S. Pension funds: Status 401 (a), 401 (b), 403 (b) or 457. The 6166 certificate remains valid until revoked (unless the FTA require a new one).
- U.S. Not For Profit Organisations: Status 501 (c) 3. The 6166 certificate remains valid until revoked (unless the FTA require a new one).
- U.S. RICs, REITs, REMICs: The legal status of the final beneficiary and its tax ID in the U.S.A. if there is one. The 6166 certificate remains valid for the fiscal year only and must be provided annually.
Other U.S. resident entities
A certificate of residence is mandatory, but the certification can be either one of the following:
- 6166 certificate duly completed and certified by the U.S. Internal Revenue Service (IRS) (the 6166 certificate replaces the Form 5000 in this case); or
- Form 5000 duly completed and certified by the U.S. intermediary in Box VI; or
- Form 5000 duly completed and certified by the IRS in BOX IV.
The above-mentioned certificate of residence remains valid for the fiscal year only and must be provided annually.
Note: The original Certificate of Residence must, in all cases, be provided to Clearstream Banking at least one business day before the first dividend payment date to which it applies, by 09:00 CET.
The following documentation is additionally required for eligible U.S. beneficial owners to benefit from relief at source via the Simplified procedure:
- Per payment Corporate Action instruction;
- One-time Certificate of Authorisation for the Simplified Procedure; and
- Per Payment Detailed List of Beneficial Owners.
Standard refund
For the standard refund procedure, the following documentation is required for the below U.S. residents:
- Certificate of Residence
Depending on the status of the beneficial owner, the certificate may be provided as follows:
U.S. Pension funds, Not For Profit Organisations and U.S. RICs, REITs, REMICs:
- 6166 certificate issued by the IRS is mandatory. The certificate must confirm the legal status and the Internal Revenue Code section to which it refers, as follows:
- U.S. Pension funds: Status 401 (a), 401 (b), 403 (b) or 457;
- U.S. Not For Profit Organisations: Status 501 (c) 3;
- U.S. RICs, REITs, REMICS: the legal status of the final beneficiary and its tax ID in the U.S., if there is one.
The 6166 certificate must be provided, in the original, with the first reclaim application of that fiscal year, a copy thereafter accepted for all future reclaims during this fiscal year. - Form 5000 non-certified.
Other U.S. resident entities
A certificate of residence is mandatory, but the certification can be either of the following:
- 6166 certificate duly completed and certified by the IRS; and
- Form 5000 non-certified;
or - Form 5000 duly completed and certified by the U.S. intermediary in Box VI;
or - Form 5000 duly completed and certified by the IRS in BOX IV.
The 6166 certificate must be provided, in the original, with the first reclaim application of that fiscal year, a copy thereafter accepted for all future reclaims during this fiscal year.
The form 5000 must be provided, in the original, per reclaim application.
In all cases, the following documentation is additionally required for eligible beneficial owners to benefit from refund via the standard refund procedure:
- A Form 5001;
- A Power of Attorney (if applicable); and
- A Letter of Request to Clearstream Banking for Reclaim of French Withholding Tax.
The required documentation must be provided by the deadlines prescribed by Clearstream Banking.
Note: The fiscal year indicated on the 6166 certificate determines the validity and, if not mentioned on the 6166 document, the certification date will be taken into consideration.
Further information
For further information about the withholding tax procedures for French equities, please refer to the Clearstream Banking Market Taxation Guide (France)
Customers may also contact the Clearstream Banking Tax Help Desk on:
| Luxembourg | Frankfurt | |
| Email: | tax@clearstream.com | tax@clearstream.com |
| Telephone: | +352-243-32835 | +49-(0) 69-2 11-1 3821 |
| Fax: | +352-243-632835 | +49-(0) 69-2 11-61 3821 |
or Clearstream Banking Customer Service or their Relationship Officer.
1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in the Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).
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