On February 5, 2024, the French Supreme Tax Court (Conseil d’État) voided French tax authority guidelines from May 2023 that provided that shares acquired upon the exercise of founder.
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In a landmark decision of 11 December 2020 involving digital player Conversant (fka Valueclick), the French Supreme Tax Court (Conseil d’État) ruled that a French company can qualify as a dependent agent, and thus as a French permanent establishment, of an Irish affiliate if the French company habitually exercises the authority to conclude contracts in the name of the Irish affiliate, even though formal consent to these contracts can only be given by the Irish affiliate.
IN DEPTH
This is the first time that the French Supreme Tax Court has ruled on the characterisation of a permanent establishment for a digital player rendering services in France through a non-French entity
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The French Supreme Tax Court (Conseil d’État) ruled that the French withholding tax on the capital gain derived from the disposal of a substantial shareholding in a French company by a non-resident company is not compliant with EU law.
IN DEPTH
Background
Under the French participation exemption regime, the capital gain realized by a French parent company subject to French corporate tax upon the sale of a qualifying shareholding is exempt from taxation, subject to the inclusion of a lump sum representing 12% of the capital gain (which makes for an 88% exemption). This 12% inclusion does not constitute a partial taxation of the capital gain, but a way to recapture past deductible expenses in relation to the qualifying shareholding.
French Withholding Tax on Capital Gains by Non-French Companies Illegal natlawreview.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from natlawreview.com Daily Mail and Mail on Sunday newspapers.