Commission refers France to the EU court over dividend tax credit

by Davide Anghileri

The European Commission on 8 December has asked France to comply fully with the ruling in Accor Case (C-310/09) of the Court of Justice of the European Union, released 15 September 2011, concerning the taxation of intercompany dividends.

The Accor Case concerned a request for a preliminary ruling by the French Conseil d’État in connection with a dispute over the refund of tax paid in France by companies with subsidiaries in other countries of the European Union under the ‘advance payment of tax’ mechanism.

On the basis of the preliminary ruling in Accor, the Conseil d’État gave its decision in two different judgments in December 2012.

However, in the opinion of the Commission, these decisions are not in line with EU law for three reasons. First of all, because the tax paid by sub-subsidiaries in other EU countries was not taken into account in France.

Moreover, the Commission considers the decisions contrary to the right of establishment and to the free movement of capital because they limit the system of tax credits to one third of the dividend redistributed by a non‑French subsidiary. This limit constitutes a difference in treatment between companies receiving dividends originating in other Member States and those receiving dividends of French origin, the Commission said.

Finally, the Commission believes that formal and disproportionate evidence-based requirements were imposed on the non-French subsidiary. Also on this point, the Commission said that the French decisions do not comply with the criteria laid down by the Court of Justice in its judgment. In fact, the Commission said that specific requirements concerning the evidence required restrict the right of the companies concerned to a refund were maintained.

Therefore, the Commission sent France a letter of formal notice on 27 November 2014, followed by a reasoned opinion on 29 April.

Since France has not yet complied, the Commission is now bringing the matter before the Court of Justice of the European Union.

France must now communicate the measures taken to comply with EU law to eliminate the discrimination in the taxation of dividends originating in other Member States, as stated in Accor Case.

If France fails to so communicate, the Commission may ask the Court to impose penalties. Then, if the Court finds that France has breached EU law, France must take action to comply with the Court judgment.

Davide Anghileri

Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.

Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues. He can be reached at

Davide Anghileri

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