• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/13/2013

France - Withholding tax on dividends distributed to collective investments  

August 13: The French tax administration in July 2013 released comments concerning the rules applicable for withholding tax on dividends distributed to undertakings for collective investments that are located in EU Member States, and concerning the transposition into French law of a related EU directive.


Article 6 of the amended 2012 Finance Act of 16 August 2012 repealed the withholding tax provided for in Article 119 bis (2) of the French tax law concerning dividends distributed to an undertaking for collective investment (UCI or “OPC” in French) when located either in EU Member States or in a country or territory having concluded an agreement for administrative assistance to combat tax fraud and evasion, provided that the undertaking for collective investment satisfies both of the following conditions:

  • The undertaking for collective investment raises capital from a certain number of investors with a goal of investing the capital, under a defined investment policy, in the interest of those investors.
  • The undertaking has characteristics similar to the French undertaking for collective investment (OPCs) as expressly described in Article 119 bis (2) (notably OPCVMs, SICAFs, OPCIs).

A withholding tax (limited to 15%) is also provided for distributions that are drawn from the exempt income realized by certain entities—SIICs, SPPICAVs or subsidiaries of SIICs, or SPPICAVs—in favor of French and foreign undertakings for collective investment that also satisfy the same conditions.

Tax administration’s comments

Further to the transposition of an EU directive (Directive 2011/61/EU of 8 June 2011 (the “AIFM Directive”)) into French law, the French tax administration on 25 July 2013 published its comments on these provisions—thereby setting the state for the method to be used in conducting the comparability test.

The French comments indicate that:

  • Undertakings for collective investment (or OPCs) located in EU Member States would fairly easily realize the immediate benefit of the 0% or 15% withholding tax from their French paying agent (i.e., the financial institution paying the dividends on the OPC’s account) through some filings.
  • Undertakings for collective investment located outside the EU would apparently not be allowed the same benefit from the paying agent but would need to file a claim and provide the tax authorities with appropriate documentation evidencing that they are comparable to French OPCs.

Read an August 2013 report [PDF 190 KB] prepared by Fidal Direction Internationale.

For more information, contact a tax professional at Fidal Direction Internationale* in Paris or with KPMG’s France Tax Center in New York:

Gilles Galinier-Warrain, French Tax Center, KPMG LLP, New York

+1 212-954-8605

Laurent Leclercq, Tax Partner

+33 (0)1 55 68 16 42

Yves Robert, Tax Partner

+33 (0)1 55 68 15 76

Séverine Lauratet, Senior Manager

+33 (0)1 55 68 16 25

*Fidal Direction Internationale is a French law firm that is independent from KPMG and its member firms.

©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now