French tax treatment of foreign dividends and interplay with fundamental EU freedoms

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French tax treatment of foreign dividends and interplay with fundamental EU freedoms

French corporate tax legislation stipulates that distributions of profits from a subsidiary to a French parent company are not, in principle, taxed at the parent. Excluded from this, however, is a 5% proportion, which represents the charges incurred by the French parent company in connection with its holding in the subsidiary. These charges are not to be deductible because they serve the realisation of non-taxable income by the French parent company, namely the distribution of profits from its subsidiaries.

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