The law no94-1 dated January 3, 1995 created a new kind of commercial company: the simplified joint-stock company.
The legal characteristics of this company allow to compare it, for the application of the French General Tax Code ("Code General des Impots") and the Tax Procedures Book ("Livre des Procedures Fiscales"), to a French societe anonyme (limited liability company).
As a consequence, the provisions of article 119 ter of the French General Tax Code should be applied to simplified joint-stock companies.
Thus the withholding tax provided for by article 119 bis-2 of the above-mentioned Code cannot be applied to the dividends, which such a company, liable for corporate income tax without exemption from this tax, distributes to a legal person fulfilling the conditions mentioned in paragraphs 2 and 3 of article 119 ter.
The whole of the conditions to which the distributing and beneficiary companies are submitted, as specified by the Tax Authorities directive dated August 3, 1992 may be applicable, mutatis mutandis, to the case of the simplified joint-stock company.
The exemption from withholding tax, which may possibly be applied, does not of course foresee the tax treatment of the dividends which will be applied in the state of residence of the actual beneficiary of these dividends, insofar as the new legal form of the company involved is not aimed at by the directive of the European Communities Council no90/435 dated July 23, 1990.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be brought about your specific circumstances. For additional information contact Claire Acard on 33/(1)/55 61 10 10, Lionel Benant on 33/126.96.36.199 or Joel Fischer on 33/188.8.131.52 or enter text search: "Archibald Andersen Profile" and "Business Monitor". The members of Archibald Andersen Association d'Avocats (S.G. Archibald and Arthur Andersen International) are registered with the Hauts-de-Seine Bar and the Lyon Bar.
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