France: taxes for branches of non-French companies

France:  taxes for branches of non-French companies


The French “Code Général des Impôts” (General Tax Law) subjects the profits of permanent establishments of companies which have their headquarters in other Member States to a withholding tax of 25%. This withholding tax can, however, be reduced on the basis of a double taxation convention entered into between France and the other Member State. Some conventions provide for a reduction of this tax to zero, but others do not. The Commission considers such differential tax treatment cannot be objectively justified, and is incompatible with EC Treaty rules on freedom of establishment and on equal treatment for firms with their headquarters in any Member State (Articles 52 and 58).

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