France: Finance Bill 2025 - Ruling from the French Tax authorities
Clearstream Banking1 informs clients that, following our announcement C25013, the French tax authorities published a ruling on 17 April 2025 providing guidelines on the measures introduced by the Finance Law for 2025 strengthening the anti-dividend arbitrage provisions set forth in article 119 bis A of the French Tax Code.
According to those guidelines, effective as of
1 January 2026
the relief at source on the rates provided for in the tax treaties via the simplified procedure will no longer be applicable to beneficial owners residing in the following countries: Bahrain, Egypt, Finland, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
For these investors, the person making the income payment will be required to apply the statutory withholding tax rate applicable at the time of payment.
It will be up to the beneficiary, or the paying institution acting on its behalf, to request a refund of withholding tax by providing proof that it meets all the conditions set out in the applicable tax treaty for withholding tax exemption.
Beneficial owners residing other tax treaty countries, as well as those benefiting from reduced rates or exemptions under French domestic law, will not be affected by this measure.
Impact on clients
Any existing documentation to obtain tax treaty rates via the simplified procedure will expire on 31 December 2025 for beneficial owners resident in Bahrain, Egypt, Finland, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
From 1 January 2026, dividend income from French sources paid to these beneficial owners will be subject to withholding tax at the statutory withholding tax rate except for those benefiting from reduced rate or exemption under French domestic law.
Beneficial owners who are subject to the maximum tax rate will have the possibility to request a refund by following the standard refund procedure currently available.
Further information
For further information, please contact the Clearstream Banking Tax Help Desk, Clearstream Banking Client Services or your Relationship Officer.
Please refer to the CBL: Market Taxation Guide - France (securities held in CBF) or CBF: Market Taxation Guide - France (securities held in CBF) for further guidance.
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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG, registered office at Mergenthalerallee 61, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500. Clearstream Banking S.A. is registered as an Australian CS (Overseas) Facility, under subsection 824B(2) of the Corporations Act 2001, with registration number ARBN 675 244 783.