The Action (2017/C 293/27) brought on July 10, 2017 by the European Commission versus the French Republic has been published in the Official Journal of European Union. The Action was about a French national provision on tax treatment of dividends, which the Commission finds discriminatory and may restrict the free movement of capital.
The French national provision intends to eliminate double economic taxation of dividends payment. It provides that a parent company may set off against the advance payment (can be understood as corporate tax) when it redistributes to its shareholders dividends paid by its subsidiaries. However, the favorable treatment only applies when the subsidiaries are established in France.
The Commission finds that the French Republic has failed to fulfil its obligations under the principles of equivalence and effectiveness and in accordance with Articles 49, 63 and the third paragraph of Article 267 of the Treaty on the Functioning of the European Union.
The European Commission complains that France refused to respect the Accor case (C-310/09), in particular in imposing restrictions contrary to EU law for the reimbursement of a tax unduly levied, namely withholding tax. The Commission considers that France is not complying with the judgment of the Court of Justice on three specific points:
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