The EU Commission has brought an action in the Court of Justice of the European Union, alleging that France is not complying with the Court’s earlier decision in Accor, concerning France’s application of the dividend tax credit to intercompany dividends.
The EU Commission had previously announced its dispute with France over how it was implementing the case, Ministre du Budget, des Comptes publics et de la Fonction publique v Accor SA, Case C-310/09, (Accor), and expressed its intention to bring the matter before the Court.
The Court of Justice today published notice the action brought by the Commission, which was dated July 10.
In Accor, decided September 2011, the EU Court determined that French tax rules designed to eliminate double taxation of dividends illegally discriminated with respect of taxation of dividends that have their source in EU States other than France.
The EU Commission is now arguing that France is not giving full effect to the earlier decision because it is imposing illegal restrictions before it will reimburse withholding tax.
The Commission considers that France is not complying with the judgment of the Court of Justice because (1) it does not take into account taxes already paid by non-French sub-subsidiaries; (2) it maintains, in order to limit the right to reimbursement of the companies concerned, requirements regarding the evidence to be provided, not observing the criteria laid down by the Court of Justice; and (3) it limits in an absolute manner the tax credit system to a third of the dividend redistributed by a non-French subsidiary.
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