The European Commission has today charged that France’s scheme for taxing of dividends from nonresident subsidiaries is discriminatory, and has asked France to resolve the issue.
The Commission maintains that France is not fully complying with the Court of Justice of the European Union decision in Ministre du Budget, des Comptes publics et de la Fonction publique v. Accor SA (C-310/09) (Accor), which was rendered in September 15, 2011.
In Accor, the Court ruled that France’s different tax treatment for domestic and foreign dividends restricted the freedom of establishment and free movement of capital and was not justified by overriding reasons in the public interest.
The Commission said a December 2012 judgement of the Conseil d’État does not follow EU law because “the tax paid by sub-subsidiaries in other EU countries was not taken into account, tax credits were systematically limited to one third of the dividend redistributed in France by non-resident subsidiaries, and formal and disproportionate evidence-based requirements were imposed.”
The Commission’s request took the form of a reasoned opinion. France has two months to respond, after which the Commission said it may bring a suit in the Court of Justice of the European Union.
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