France Administrative Court of Montreuil Clarifies Withholding Tax Treatment for Non-Reinvoiced Expenses

The French Administrative Court of Montreuil May 22 issued Jurisprudence Letter No. 24, clarifying corporate income tax and withholding for expenses incurred by BNP Paribas for nonresident branches or subsidiaries. The taxpayer didn’t reinvoice expenses for its foreign entities, for fiscal years 2017 through 2020, but spontaneously reintegrated those expenses into its taxable income. The tax authorities assessed withholding tax for 2017 and 2018, and the taxpayer voluntarily paid withholding tax for 2019 and 2020 before seeking discharge and a refund. Upon review, the French Administrative Court of Montreuil found that: 1) expenses for 2017 and 2018 weren’t deemed distributed ...