Since the CJEU deemed it contrary to European Union law on May 10, 2012 (Santander Asset Management case - Cases C-338/11, C-339/11 and C-347/11), the withholding tax applicable to distributions of dividends from France to foreign UCITs, OPCI or SICAF was eliminated.

However, income distributed by SIICs or SIIC or SPPICAV subsidiaries is subject to the 15% withholding tax when it is paid to French OPCVMs, OPCIs or SICAFs, or equivalent funds abroad.

In order to compensate for this elimination, an additional corporate income tax contribution was created, due by French or foreign companies and organizations who are subject to the corporate income tax in France, with the exception of OPCIs and entities which satisfy the category of small, mid-size and large companies (“PME”) within the meaning of European Union law (companies with fewer than 250 employees and whose annual turnover does not exceed 50 million euros or whose total annual balance sheet does not exceed 43 million euros).  This contribution is 3% of the amounts distributed or deemed distributed and must be paid by the distributing company when it makes the advance payment of the corporate income tax after distributions are paid.

However, the following are expressly excluded from the scope of this contribution:  distributions paid between companies of the same tax consolidation group, between companies of the same cooperative bank, between companies which have elected for the SIIC regime and dividends paid in the form of shares, provided that the shares are not redeemed within the context of a share capital reduction not due to losses within a one-year period.

These new provisions are applicable to distributions paid as of the date on which the act is published.