Exlusion of the parent/subsidiary regime for non-voting shares provided by article 145-6b ter codified now in article 145-6c of the French tax code: Claims to be filed now

As a reminder, article 145-6b ter of the French tax code (now codified in identical terms under article 145-6c of the French tax code) excludes from the benefit of tax exemption of the parent/subsidiary regime, the dividends received from non-voting shares except if the Company holds securities representing at least 5% of the capital and the voting rights of the issuing company.

The Supreme Court has just passed a constitutional referral to the French Constitutional Council regarding the constitutionality of that article (Supreme Court, Decision n° 397316 Société Natixis, May 18, 2016).

The Constitutional Council has now three months to make a decision.

If the Constitutional Council holds unconstitutional the article 145-6b ter of the French Tax Code, it could limit the effect of its decision for the past, for instance to litigation currently in course or even to litigations already in progress before the courts.

In the meantime, in order to protect against such a limiting effect, we recommend:

  • Urgently to file claims to the tax authorities for the corporate tax paid in 2014 and 2015 due to the exclusion of the parent/subsidiary regime for non-voting shares
  • Urgently to submit legal briefs before the relevant lower Administrative Court for those clients who have already filed claims to the tax authorities and have not received an express rejection within a six-month time limit following the receipt of the claim by the tax authorities
Michel Guichard

Michel Guichard, Partner, leads the Indirect Tax activity. With more than 30 years’ experience in International and French Tax law, he advises his clients on indirect tax matters. Michel is […]