France Administrative Court of Appeal of Paris Clarifies Dividend Taxation Rules Under EU Parent-Subsidiary Directive

The French Administrative Court of Appeal of Paris Jan. 27 issued Decision No. 24PA02158, clarifying dividend taxation rules under EU Directive 2011/96/EU, the EU Parent-Subsidiary Directive. The taxpayer, a resident holding and management services company, was assessed withholding tax on dividends distributed in 2017 and 2018 to its Luxembourg parent company. The taxpayer argued that the dividends were exempt under the EU directive or, alternatively, subject only to a 5 percent rate under the France-Luxembourg DTA. The Administrative Court of Paris rejected the taxpayer’s request for discharge of the assessment and penalties. On appeal, the Administrative Court of Appeal of ...